Takeaways

• Early August, we highlighted that as an illustration of the current turmoil on lithium prices, Arcadium Lithium decided to suspend or delay two of its four expansion projects.
  
• Despite such foggy conditions, Rio Tinto has expressed interest in acquiring Arcadium Lithium, as confirmed by both companies in separate statements.
• If the deal proceeds, Rio Tinto would become one of the largest lithium suppliers, following only Albemarle and SQM, and gain access to lithium mines and processing facilities across four continents.
• This potential acquisition reflects mining companies' growing efforts to secure key minerals for the global energy transition, something we highlighted in Lithium Part III published back in March 2023.
• The strategic rationale and counter-cyclical timing to bid for Arcadium now make strong sense.
• Moreover, we believe that the recent PBoC announcement is not insignificant in this announcement.
• At its recent investor day on September 19, Arcadium gave very ambitious development objectives and the analysis of all its assets and projects (upstream mainly brine and downstream) makes them quite credible.