Lithium Stocks Surge on Report Rio Tinto May Be Considering Acquisition
Key Takeaways
- Shares of Albemarle and other lithium producers advanced Friday following a report that giant miner Rio Tinto might be looking to make an acquisition in the sector.
- The Australian said Rio Tinto may be looking for a big purchase, and a major deal in the lithium industry might not be too far off.
- Rio Tinto already does some lithium mining, calling the metal used in EV, laptop, and cellphone batteries part of its low-carbon portfolio.
Shares of Albemarle (ALB), Arcadium Lithium (ALTM), and Sociedad Quimica y Minera, or SQM (SQM), jumped Friday following a report that mining giant Rio Tinto (RIO) could be looking to buy a company in the lithium sector.
The Australian wrote, "Rio Tinto may join BHP (BHP) in a big acquisition and some believe that a major deal in the lithium space may now not be too far away."
One of the world's biggest mining companies, Rio Tinto is better known for its copper, iron ore, and diamond extraction. However, it does produce lithium, which it says "is part of our portfolio of materials essential to a low-carbon future."
Lithium Helps Power EVs, Laptops, Cellphones
Lithium is a key ingredient in batteries used to power electric vehicles (EVs), as well as personal electronics such as laptops and cellphones.
Albemarle is the top lithium producer. However, it has struggled lately because of the tumbling price of lithium, which was driven lower by falling demand for EVs. In addition, Chief Executive Officer (CEO) Kent Masters has complained about China's dominance in the market, and warned Western nations they need to take steps to end it or risk losing supplies.
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