Rio Tinto inks earn-in deal for lithium project in Rwanda

The world’s second-largest miner has the option to invest up to $7.5 million in two stages to earn up to a 75% interest in the license, which covers 2,750 hectares in southern Rwanda.

Rio has agreed to make cash payments to Aterian totalling $300,000 to reimburse it for previous operational expenses incurred.

“This is a transformative deal for Aterian and highlights our ability to identify potential world-class deposits in critical minerals such as lithium,” chairman Charles Bray said in the statement.  

The company said an initial $200,000 payment is due on completion of satisfactory due diligence by Rio Tinto, with an additional $100,000 payment due at the start of Stage 2.

In return, Aterian has granted Rio Tinto a 2% net smelter return over the project capped at $50 million. The investment will be due by a future joint venture between Rio Tinto and Kinunga Mining, which holds the licence for the HCK project. Aterian holds a 70% interest in Kinunga Mining.

The deal also grants Rio Tinto an exclusivity option to invest in Aterian’s other two projects in Rwanda.

Aterian said it has identified 19 separate lithium/caesium/tantalum pegmatite zones across the 2,750-hectares project, which is well connected to local infrastructure.

Shares in the critical and strategic metals junior jumped more than 40% on the news in early trading in London to 1.49p, but were down mid-afternoon to 1.04p, leaving the company with a market capitalization of £9.95 million ($12.7m).
Eyes on lithium

Rio’s decision to partner with Aterian highlights the mining giant’s growing interest in the battery metals, which was partially crushed last year, after Serbia revoked its licence for the $2.4 billion Jadar lithium project.

Rio, which has been actively searching for new assets since, later bought the Rincon lithium project in Argentina, where it has faced an annual inflation rate of more than 100% in the past year.

Chief executive  Jakob Stausholm said that while the outlook for long-run lithium prices was unclear, the company expects a shortage of the metal.

Committed lithium supply and capacity expansions, according to Rio Tinto, will contribute only about 15% to supply growth over the 2023-2050 period. The remaining 85% would need to come from new projects.