Rio Tinto's Lithium Power Play: Dominating EV Metals with Chile's Maricunga Project

The global shift to electric vehicles (EVs) has ignited a gold rush for lithium—a critical battery metal now more strategic than oil. In this race, Rio Tinto’s $900 million partnership with Chile’s state-owned mining giant Codelco to develop the Salar de Maricunga lithium project stands out as a masterstroke of strategic dominance. By combining DLE (Direct Lithium Extraction) innovation, Chile’s unparalleled lithium reserves, and Codelco’s regulatory clout, Rio Tinto is positioning itself to leapfrog rivals like SQM and Albemarle. Here’s why this project is a must-watch for EV metal investors—and why now is the time to act.

The Lithium Boom: A Secular Growth Story

The EV revolution is fueling a lithium demand explosion. By 2030, global lithium demand is projected to hit 1.5 million metric tons (from ~600,000 in 2023), driven by 40 million annual EV sales. Yet supply remains constrained: traditional lithium brine projects in Chile and Argentina take 5–7 years to develop and face water scarcity, environmental backlash, and regulatory hurdles. This creates a $40 billion+ gap between projected demand and existing supply by the end of the decade.

Rio Tinto’s Maricunga project is designed to fill this void—and then some.

Why Maricunga is a Game-Changer

1. Chile’s Crown Jewel: High-Grade Lithium, State Backing
The Salar de Maricunga holds 20 million tonnes of lithium reserves, rivaling the famed Atacama Salar (home to SQM and Albemarle). Codelco, Chile’s largest copper producer and a state entity, controls the mining rights—a critical advantage in a country where lithium policy is tightly regulated. With Codelco holding 50.01% of the joint venture, the project gains political momentum to fast-track permits and secure local community buy-in.

2. DLE Technology: The Key to Speed and Sustainability
Traditional lithium extraction relies on evaporation ponds that take years to produce usable lithium—and consume vast amounts of scarce water. Rio Tinto’s DLE technology, proven in its Rincon project in Argentina, cuts production time to 2–3 years and reduces water use by 90%. This isn’t just a “greener” play; it’s a cost-killer. At Maricunga, DLE could slash capital expenditures by 30% compared to conventional methods, enabling Rio to undercut rivals on price.

3. A $900M Roadmap to Dominance
The project’s phased funding structure ensures minimal upfront risk:
- 2025–2026: $350M for feasibility studies and securing regulatory approvals.
- Post-2026: $500M for construction, contingent on a final investment decision (FID).
- By 2030: $50M bonus if first lithium production is achieved.

This staggered approach mitigates execution risks. With Codelco’s logistical support and Rio’s DLE expertise, the project is on track to begin production by 2030—a full 2–3 years faster than conventional projects.

Why Competitors Can’t Keep Up

SQM and Albemarle dominate today’s lithium market, but they’re locked into outdated models:
- High Costs: Traditional evaporation ponds require massive water inputs and years of development.
- Regulatory Gridlock: Chile’s new lithium law (2023) mandates state control over lithium projects, making partnerships like Maricunga’s Codelco tie-up essential for future projects.
- Environmental Backlash: Evaporation ponds have drawn lawsuits over water diversion and habitat destruction—risks DLE sidesteps.

Rio Tinto’s tech-driven approach isn’t just a competitive edge; it’s a moat. Maricunga’s high-grade brine (among the world’s richest) and DLE’s efficiency could give Rio a $3,000/ton cost advantage over rivals by 2030.

The Risks—and Why They’re Overblown

Critics point to DLE’s unproven scalability and the project’s reliance on regulatory approvals. True, DLE has never been deployed at Maricunga’s scale. But Rio’s Rincon project in Argentina—a smaller DLE trial—has already demonstrated the technology’s viability. Meanwhile, Codelco’s state backing ensures smooth regulatory passage in Chile.

The bigger risk? Missing the lithium megatrend entirely. By 2030, lithium could be a $100 billion market. Companies that control low-cost, tech-driven supply chains—like Rio Tinto—will own that future.

Investment Thesis: Buy the Disruptor

Rio Tinto’s Maricunga project isn’t just a lithium play—it’s a strategic land grab in the EV metals market. With its DLE edge, Codelco’s political leverage, and a project timeline that outpaces competitors, Rio is primed to capture a dominant share of the lithium boom.

Action Items for Investors:
1. Buy Rio Tinto (RIO): Its stock is undervalued relative to lithium’s growth potential.
2. Short SQM (SQM) and Albemarle (ALB): Their reliance on outdated methods makes them vulnerable to disruption.
3. Monitor the FID (2026): A green light here would trigger a re-rating of RIO’s valuation.

The EV revolution won’t wait. Rio Tinto’s lithium bet is the clearest path to profiting from it.

Final Call: Lithium is the new oil. With Maricunga, Rio Tinto is the OPEC of the EV era. Act now—or risk being left behind.