Anglo-Australian miner Rio Tinto on Thursday took a final investment decision on its $2.5 billion Rincón lithium project in Argentina, Kallanish reports.

The milestone follows last week’s reserve estimate announcement and comes despite the ongoing bearish lithium market. Rincón, located in Salta province, will have the capacity to produce 60,000 tonnes/year of battery-grade lithium carbonate.

With the investment approval, Rio plans to start construction of the commercial-scale plant in mid-2025, subject to permitting. First production is expected in 2028, followed by a three-year ramp-up to full capacity. The operation will have a life of mine of 40 years.

Currently, the company already operates a 3,000-tonne starter plant. That means the new operation will have capacity to produce 57,000 t/y, which is higher than the 53,000 t/y production target it announced earlier this month. The additional tonnage comes from Rio’s confidence in debottlenecking and improvement programmes.

“The attractive long-term outlook for lithium driven by the energy transition underpins our investment in Rincón,” explains Rio chief executive Jakob Stausholm. “We are dedicated to developing this tier 1, world-class resource at scale at the low end of the cost curve. We are equally committed to meeting the highest ESG standards, leveraging our advanced technology to halve the amount of water used in processing, while continuing to grow our mutually beneficial partnerships with local communities and Salta province.”

The lithium project consists of brine extraction using a production wellfield, processing and waste facilities, plus associated infrastructure. It relies on direct lithium extraction (DLE) technology, for which a provider is yet to be confirmed.

Its ore reserves are 60% higher than Rio assumed at the time of acquisition. Measured ore resources are estimated at 1.54 million tonnes of lithium carbonate equivalent (LCE), indicated at 7.85m t and inferred at 2.29m t. The asset, part of South America’s lithium triangle, is expected to be in the first quartile of the cost curve.

“Building on Argentina’s supportive economic policies, skilled workforce, and exceptional resources we are positioning ourselves to become one of the top lithium producers globally,” adds Stausholm. “Lithium will become one of the key pillars of our commodity portfolio for decades to come.”

Rio is in the process of acquiring Arcadium Lithium, a move that will make the miner one of the biggest lithium players across the global value chain with up-, mid- and downstream operations worldwide. The company is also mulling a similar size investment in Serbia – the Jadar lithium project.