The Rio Tinto Ltd (ASX: RIO) share price has risen 0.7% after the ASX mining share announced a major lithium deal.
Rio Tinto is a significant global miner, with operations in iron ore, copper, lithium and various other commodities around the world.
Rio Tinto’s major lithium deal
The miner announced that it has signed a binding agreement with Corporacion Nacional Del Cobre de Chile (Codelco) to form a joint venture to develop and operate a high-grade lithium project in the Salar de Maricunga in Chile.
Salar de Maricunga is a large lithium-containing resource base in the Atacama region with the potential for scalable, long-life and low-cost production. Its brine has one of the highest average grades of lithium content in the world.
Under the agreement, Rio Tinto will buy a 49.99% interest in Salar de Maricunga SpA, which Codelco holds its licenses and mining concessions in the region, by funding studies and development costs.
The financial commitments
The ASX mining share said it will invest $350 million of initial funding into the joint venture towards additional studies and resource analysis to progress the project to a final investment decision.
It has also agreed to invest into $500 million into the joint venture once a decision is made to proceed with the project, towards construction costs. These milestones, subject to further studies, are targeted to occur before the end of the decade.
Finally, the business will invest another $50 million into the joint venture if the joint venture achieves its aim of delivering first lithium by the end of 2030.
Rio Tinto said it will fund further capital requirements in line with their share of ownership of the joint venture.
The transaction is expected to close by the end of the first quarter of 2026, subject to regulatory approvals and satisfying other usual closing conditions.
Final thoughts on the Rio Tinto share price
Rio Tinto said developing this resource would deliver further value-adding growth in its portfolio of critical minerals essential for the energy transition.
I like the diversification that Rio Tinto’s mining portfolio has across different commodities. Though, it is increasingly betting on lithium and South American mining, which is somewhat riskier than its copper and Australian operations, in my opinion. But, Chile is a great country, so I think this is a good move. I think Rio Tinto shares are more appealing than BHP Group Ltd (ASX: BHP) shares because of its commodity diversification, as well as its efforts to create a massive iron mine in Africa.
