The Rio Tinto Ltd (ASX: RIO) share price is under pressure on Friday morning.
At the time of writing, the mining giant's shares are down 2.5% to $121.03.
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Why is the Rio Tinto share price falling?
Investors have been selling the miner's shares this morning after weakness in the mining sector offset the release of a big lithium announcement.
According to the release, Rio Tinto has approved a US$2.5 billion (A$3.9 billion) investment to expand the Rincon project in Argentina. Management believes that this demonstrates its commitment to building a world-class battery materials portfolio.
The Rincon project is located in the lithium triangle. It consists of brine extraction using a production wellfield, processing and waste facilities, as well as associated infrastructure. The project uses direct lithium extraction (DLE) technology, a process that supports water conservation, reduces waste and produces lithium carbonate more consistently than other methods.
Rincon's capacity of 60,000 tonnes of battery grade lithium carbonate per year is comprised of the 3,000-tonne starter plant and 57,000-tonne expansion plant.
The company advised that Rincon's mine life is expected to be 40 years, with construction of the expanded plant scheduled to begin in mid-2025, subject to permitting.
It notes that first production is expected in 2028, followed by a three-year ramp up to full capacity, generating significant job creation and economic opportunities for local businesses.
'Attractive long-term outlook'
Commenting on the Rincon project and the company's lithium ambitions, Rio Tinto's chief executive, Jakob Stausholm, said:
The attractive long-term outlook for lithium driven by the energy transition underpins our investment in Rincon. 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.
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. This investment alongside our proposed Arcadium acquisition ensures that lithium will become one of the key pillars of our commodity portfolio for decades to come.
Following today's decline, the Rio Tinto share price is now down 7% over the past 12 months.
