Anglo-Australian mining company Rio Tinto is in discussions to purchase lithium mining company Arcadium.

Arcadium's valuation could range from $4bn and $6bn, or higher, reported Reuters, citing sources with direct knowledge of the matter.

In a press statement, Rio Tinto said: “Rio Tinto today confirmed that it has made an approach to Arcadium Lithium regarding a potential acquisition of Arcadium Lithium by Rio Tinto.

“The approach is non-binding and there is no certainty that any transaction will be agreed to or will proceed.”

The acquisition could position Rio Tinto as the world's third-largest lithium producer behind Albemarle and SQM.

The details of potential transaction, whether it will involve cash, stock or a combination, remain unclear.

The downturn in lithium prices, partly caused by oversupply from China, has reduced Arcadium's share value by more than 50% since January 2024.

Arcadium has engaged two undisclosed investment banks to facilitate the discussions with Rio Tinto.

With the Arcadium acquisition, Rio Tinto would not only gain access to lithium mining and processing operations across four continents but also inherit a customer base that includes major automakers like Tesla, BMW and General Motors.

With approximately 2,400 employees in nine countries, Arcadium derives 84% of its revenue from Asia.

Furthermore, Rio could benefit from Arcadium's expertise in direct lithium extraction.

Arcadium was established in January 2025 through the merger of US-based Livent and Australia-based Allkem.

Last month, Arcadium Lithium suspended expansion plans for its Mt Cattlin spodumene operation in Western Australia as a result of the ongoing fall in spodumene prices.