Rio Tinto (RIO.US) recognizes lithium's strategic position and partners with Chile's National Copper Company to bet on the next lithium cycle

The Chilean lithium joint venture project between the Chilean National Copper Company (Codelco) and Rio Tinto Group (Rio Tinto Group) is progressing according to plan. Rio Tinto Group's CEO and head of the lithium industry met with the chairman of the Chilean National Copper Company to discuss the Maricunga lithium project and the Chilean copper exploration project.

The Zhitong Finance App learned that the chairman of Chile's National Copper Company (Codelco) said that although the London-based mining company Rio Tinto Group (Rio Tinto Group) sent a signal that it would slow down its entry into battery metals, the lithium joint venture between Codelco and Rio Tinto Group in Chile is progressing normally according to plan.

While putting the brakes on the Serbian project and emphasizing the adoption of a “phased strategy” for lithium resources, Rio Tinto continues to advance the Maricunga large-scale lithium mine project in Chile with Codelco and discuss specific lithium extraction processes. These large mining companies are not pessimistic about “not playing with lithium mines,” but are no longer mindlessly spending money on any lithium resources. Rio Tinto's latest lays out lithium mines in the form of “options” — until the next round of lithium demand resonates with prices, it can be quickly released. However, judging from the current large-scale rise in global demand for energy storage, the next lithium cycle is likely to arrive soon.

Codelco chairman Maximo Pacheco said Rio Trott, CEO of Rio Trott, and Jerome Pecresse, head of its lithium business, met him in London on Wednesday to discuss the early-stage Maricunga lithium project and the two companies' copper exploration projects in Chile.

Pacheco said in a telephone interview that the two companies agree on the future path of these projects, adding that the approximately two-hour meeting also discussed the lithium extraction technology to be used. The strategic approval of lithium mines from both sides is more like telling the market that lithium is not a gust of wind, but a main line of the industrial chain that will take many years to follow.

After Rio Tinto shelved a lithium project in Serbia, and after Trott said at an event on Thursday that it would “slowly advance in stages” this metal, which has experienced oversupply and price pressure, Codelco Chairman's latest comments may ease Chile's concerns about lithium mine development. Trott succeeded Jakob Stausholm in August and was tasked with focusing more on mining operations and adopting a more prudent capital expenditure strategy.

Stausholm has vigorously promoted the lithium mining business, oversaw the completion of a major acquisition during his tenure, and signed cooperation agreements with Codelco and Enami, another Chilean state-owned mining company, to potentially develop new projects in Chile.

In May of this year, Rio Tinto agreed to invest up to $900 million in Maricunga, but this investment is subject to several important approvals and is dependent on a final investment decision.

Trott told investors in London on Thursday that lithium mining will become a critical strategic business for Rio Tinto in the future and presented related slides, which refer to the Chilean project as an “option” (option).

This time, Codelco+ Rio Tinto's “lithium partnership” is more about buying “long-term options” for lithium demand in the next 5-10 years. The short-term impact on the lithium price itself is limited — the “all lithium stocks flying together” era from 2021 to 2022 is probably over, but the latest statement between the two sides to steadily advance the lithium mine project has strong signal significance for “whether lithium resources are still on a strategic track”, and the cooperation between the two sides is more like giving the future an “option” and betting on the next lithium “supercycle”. When this cycle arrives, the “options” layout can quickly benefit .

Codelco and Rio Tinto's joint advance on the Chilean lithium project will not immediately reverse the lithium price trend, but it clearly sends a signal: driven by long-term strong demand for energy storage and electric vehicles, global mining giants have not withdrawn from the lithium circuit, but are using more restrained and careful methods to increase terminal resources. For investors, as global demand for energy storage surges, the story of investing exclusively in lithium is not over. It's just a “total carnival” to an “era of refined investment with only a few winners left”. The lithium investment boom will eventually return, but the form may change from “full carnival” to “concentration of leaders + premium quality resources”.

From oversupply to “energy storage frenzy”, is the lithium investment boom making a comeback?

According to several recent industry research reports and the latest statistics on the lithium market, the global lithium industry, which has continued to be impacted by the negative factor of “oversupply” since 2022, is bravely expanding on the wave of excitement over large-scale battery energy storage demand under an unprecedented AI boom.

Market confidence in the strong demand for energy storage systems (ESS) continues to grow, driven by the unprecedented AI boom in demand for electricity resources, policy incentives from governments, improved economic expectations, and electric vehicle expansion plans. According to Citigroup statistics, ESS will play an increasingly important role, and its share of total global battery demand is expected to rise from about 20% last year to more than one-third in 2030.

As soon as we mentioned “battery energy storage,” the vast majority of new energy storage projects chose lithium batteries, and the global energy storage technology route completely locked lithium in the position of the “biggest beneficiary.” According to the IEA's latest report, lithium-ion batteries account for almost all electric vehicles and new energy storage projects. The American Solar Energy Industry Association said that lithium batteries are currently the main form of renewable energy supporting energy storage, and global demand for lithium battery energy storage will explode in the next ten years.

The efficiency of lithium battery energy storage circuits is usually 85% to 90% or more, and the charge/discharge response speed is extremely fast, which can be called a millisecond response. It is particularly suitable for peak modulation, frequency modulation, and backup power supply. Although technologies such as liquid flow batteries, sodium ions, and compressed air have potential in some “long-term energy storage” segments, they all lag far behind lithium batteries in scale, cost, and capital market recognition, making it difficult to shake the dominant position of lithium in the short to medium term.

As the global AI data center expansion or construction process led by Microsoft, Google, and Amazon is in full swing, the demand for electricity from these data centers has greatly expanded, and the lithium industry has also become a major beneficiary of the AI boom. Mainly because of the power system level, AI data centers push up electricity demand on a large scale, which in turn increases demand for energy storage and flexible power resources exponentially.

According to a recent research report released by Morgan Stanley, US data center developers are facing a serious risk of electricity shortages. The supply and demand gap is expected to reach 10-20% in 2027-2028. Therefore, due to the huge implementation risk of power grid systems, demand for off-grid solutions has surged. Starting in 2026, as large-scale AI infrastructure projects such as “Stargate” are in full swing, gas generators and energy storage systems may become standard data centers.