Rio Tinto has agreed to pay $US6.7 billion ($A9.9 billion) to acquire a global lithium miner as it seeks to broaden its portfolio to include more commodities essential for a low-carbon future.
The company said it would pay a 90 per cent premium to acquire Arcadium Lithium, a dual-listed company formed in January by the merger of Brisbane-based Allkem and US-based Livent.
"Acquiring Arcadium Lithium is a significant step forward in Rio Tinto's long-term strategy, creating a world-class lithium business alongside our leading aluminium and copper operations to supply materials needed for the energy transition," said Rio Tinto chief executive Jakob Stausholm.
"Arcadium Lithium is an outstanding business today and we will bring our scale, development capabilities and financial strength to realise the full potential of its Tier 1 portfolio."
Arcadium has 2,400 employees and operations in Argentina, Australia, Canada, China, Japan, the United Kingdom and the United States.
It suspended operations at its Mt Cattlin lithium ore operation in Western Australia last month given this year's plunge in spodumene prices.
Mr Stausholm called the purchase a "counter-cyclical expansion" that gave Rio Tinto exposure to a high-growth, attractive market at the right point in the cycle - meaning, when prices were low. Lithium prices are 80 per cent off their peak.
Arcadium Lithium CEO Paul Graves said Rio Tinto had brought a compelling cash offer that reflected a full and fair long-term value to Arcadium's business.
Rio has agreed to pay $US5.85 ($A8.68) per Arcadium share, a 90 per cent premium to their price on Friday.
Word of a possible deal leaked over the weekend, causing Arcadium shares soar 45.7 per cent on Monday.
On Wednesday, Arcadium's ASX-listed shares finished down 0.5 per cent to $5.91.
The company's primary listing is the New York Stock Exchange.
Rio Tinto said it expected the transaction to close in mid-2025.
