London, June 24, 2026, 10:05 (BST)
Rio Tinto shares fell 0.6% to 7,224 pence by 0945 BST on Wednesday, extending Tuesday’s 3.3% slide. The FTSE 100 was near flat in delayed data. Rio was trading about 21% below its May 27 peak of 9,117 pence.
Jérôme Pécresse, head of Rio’s aluminium and lithium business, told Reuters that lithium should grow faster than the miner’s other divisions as it works towards annual capacity of 200,000 metric tons by 2028. “We want to show that we can build on time and on budget. That’s taking up 90% of my time,” he said. Rio plans to favour cheaper-to-run assets and contracts with minimum and maximum prices. Albemarle remains the world’s largest lithium producer, though Pécresse said Rio was seeking scale with customers rather than the top ranking. Reuters
The nearer test is this year’s output. Rio produced 12,700 tons of lithium carbonate equivalent, or LCE, in the first quarter. LCE is a common measure used to compare different lithium products. The company kept 2026 guidance at 61,000 to 64,000 tons and said Fenix 1B and Sal de Vida were due to start production in the second half.
At the 62,500-ton midpoint, Rio must produce another 49,800 tons over the next three quarters. That works out at 16,600 tons a quarter, about 31% above its first-quarter pace, according to a calculation from company data.
The 200,000-ton figure is capacity rather than promised production. Even so, using the 2026 guidance midpoint as the base implies average annual growth of nearly 79% through 2028. A quarter at full capacity would equal 50,000 tons, almost four times first-quarter output. The comparison is not like-for-like and should not be read as a sales forecast, but it sets out the size of the start-up job behind Rio’s $6.7 billion Arcadium purchase.
The balance sheet raises the stakes. Rio ended 2025 with net debt — debt less cash — of $14.36 billion, up from $5.49 billion a year earlier. Free cash flow, the cash left after capital spending, fell 28% to $4.03 billion. That leaves less room for delayed projects before shareholders start questioning the return from lithium.
Prices offer some help, but little certainty. A CME lithium hydroxide futures contract had risen 86% this year and moved above $20,000 a ton by early June. BNP Paribas still expected supply to exceed demand this year and next, Reuters columnist Andy Home reported, as higher prices draw idled production back into the market.
But execution remains the main risk. Rio’s expansion relies on new projects and direct lithium extraction, technology that separates lithium directly from brine. If the planned second-half starts slip while electric-vehicle demand softens, some capacity could sit idle. A faster return of Chinese supply would put prices under fresh pressure. Contract minimums may cushion that outcome, but would not remove it.
Rio also said it was testing Caterpillar battery-electric haul trucks with rival BHP at the Jimblebar iron ore mine. The next stage will examine charging trucks while they are moving. Rio iron ore chief Matthew Holcz said: “This trial will give us real-world data in some of the most demanding operating conditions on earth.” The programme is still an early technical test rather than an earnings driver. Rio Tinto
Rio’s second-quarter operations review on July 15 will provide the first hard check on the lithium ramp. Half-year results follow on July 29.
