The Rio Tinto Ltd (ASX: RIO) share price is in the red today amid lithium acquisition news.
The mining company's shares are currently trading at $116.77, a 1.43% fall. The S&P/ASX 200 Resources Index (ASX: XJR) is also down 0.95% at the time of writing while the BHP Group Ltd (ASX: BHP) share price is down 0.77%.
Let's take a look at what Rio Tinto announced today.
Lithium acquisition news
Rio has cleared the final hurdle to acquire the Rincon Mining lithium project in Argentina for $825 million.
The company has received approval from the Australian Foreign Investment Review Board (FIRB) for the takeover.
The "underdeveloped" lithium brine resource is located in the so-called lithium triangle in the Salta Province of Argentina.
Rio sees the project as one that can help the company decarbonise, given the project's low carbon footprint.
Rio informed the market of plans to acquire the project in December 2021.
The company highlights lithium demand is predicted to surge between 25 to 35% per year over the next decade.
Yesterday, UBS upgraded Rio's shares from a "sell" to neutral on the back of increasing iron ore price forecasts.
The gold price fell 1.73% overnight, while silver dropped 2.35%. Rio mines gold, silver, diamonds, copper, aluminum, iron ore, and uranium.
Management comment
Commenting on the news, Rio Tinto chief executive Jakob Stausholm said:
Rincon strengthens our battery materials business and positions Rio Tinto to meet the double-digit growth in demand for lithium over the next decade, at a time when supply is constrained.
We will be working with local communities, the Province of Salta and the Government of Argentina as we develop this project to the highest ESG standards.
Rio Tinto share price snapshot
The Rio Tinto share price is up 17% this year to date, gaining about 4% in the past 12 months.
Rio Tinto shares have risen 6% over the past week alone.
In contrast, the S&P/ASX 200 Index (ASX: XJO) is up nearly 10% in the past 12 months.
Rio has a market capitalisation of more than $43 billion based on its current share price.
