Anglo-Australian mining giant Rio Tinto has struck a deal worth about USD 6.7 billion to buy lithium chemicals producer Arcadium.
The move gave the company a significant player in the fast-growing battery sector, AFP reported.
The value of the agreement for Arcadium, which was only established this year, is USD 5.85 per share, a premium of almost 40% over the market average.
The deal offers Rio Tinto access to far more of the chemicals needed to create lithium batteries, and is a bet that the multi-billion-dollar-a-year electric vehicle market will continue to grow.
If it receives regulatory approval, Rio Tinto will become the world's third-largest lithium supplier.
However, the deal is not without risk.
The lithium industry has been struggling with oversupply and flagging sales of electric vehicles, which has depressed lithium prices and led to mines around the world shutting or reducing production, at least temporarily.
Earlier this year, Arcadium Lithium announced it was shutting down its mine in Western Australia, citing low market prices.
Australia is the world's largest supplier of lithium, which is used in a variety of products including batteries for hybrid and electric cars, laptops and phones. | BGNES
