Rio Tinto Limited (ASX: RIO) has one exciting project that could see development sped up if lithium prices continue to soar.

We’ve written several times about the booming demand for lithium and soaring share prices of the ASX-listed lithium explorers and producers, and the resource giant has the potential to join the fray with its Jadar Project in Serbia.

Jadar was discovered in 2004 and contains a unique mineral named Jadarite for obvious reasons that is only found in Serbia’s Jadar basin. Jadarite also happens to be substantially made up of lithium and boron (and has the same chemical composition as the fictional kryptonite of Superman fame).

Drill Rig in Jadar

Drill Rig in Jadar, Serbia. Source: Rio Tinto

What is exciting about the Jadar project is that on its own, the deposit has enough lithium to supply one fifth, or 20% of the world’s demand for lithium. In February 2016, Rio Tinto gave the go ahead to proceed with the feasibility study for the Jadar Project. Development from its current phase to first production will take about 6 years according to Rio Tinto’s Minerals division.

Jadar will produce both lithium and borates – the former used in ceramics, glass, polymers and alloys as well as batteries for electric vehicles and renewable energy storage, and borates’ inclusion in insulation fibreglass and wind turbines.

Lithium end use

Source: Lithium Market outlook 2017, Roskill Information

Rio’s Diamonds and Minerals CEO Alan Davies told Fairfax Media late last year, “Lithium carbonate would be new for us, but the world will need a lot more lithium in the future for electric cars,” he said. “Hopefully we’ll be able to supply into that sector and be a strategic partner either with a car manufacturer or a battery manufacturer.

The entry of Rio Tinto into the lithium market should scare the smaller explorers and producers, because of the vast amount of capital that Rio can bring to bear – allowing it to produce lithium at ultra-low prices and in vast quantities – as it does with iron ore. That’s a threat that we warned about recently – high cost producers will be the ones to avoid, although they do have a head start on Rio.

Foolish takeaway

Like most other major commodities, once demand grows substantially, it’s only a matter of time before the major miners like Rio, BHP Billiton Limited (ASX: BHP), Vale, Glencore and Anglo American become involved.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.