Mining giant Rio Tinto in talks to buy US lithium producer Arcadia

Second largest miner in the world Rio Tinto US lithium producer Arcadium has expressed interest in acquiring it, the two companies confirmed in separate statements on Monday.

No financial specifics were released. Rio Tinto said there is no guarantee any transaction will be agreed.

Arcadium Lithium's market cap is currently $3.31 billion, according to data from LSEG. The company's Australian-listed shares jumped more than 42% in early trade on Monday.

If the deal is completed, Rio Tinto will become one of the largest suppliers of lithium, trailing only Albemarle and SQM. The move comes as mining companies look to secure minerals needed for the global energy transition

MST Marquee's head of energy research, Saul Kavonic, told CNBC that Rio Tinto is waiting for a lithium downturn to pursue M&A that could provide it with a world-scale lithium division.

“Ultimately, Rio Tinto only wanted to play in the lithium space if they could be a top 3 producer,” he told CNBC via email.

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