Mr Stausholm’s desire to acquire more Canadian lithium assets comes as the mining giant has made a string of investments across the globe to increase its exposure to the battery metal.
But he declared Rio would not pay through the nose to secure more lithium, an essential commodity for decarbonisation and heavily sought after by electric carmakers.
His comments came after New York-listed Albemarle paid $C109 million ($123 million) for the stake in Patriot, making the US giant the biggest shareholder in the explorer just three weeks after Patriot weathered a short-seller attack.
“We are looking at a number of opportunities. It is a pretty hot market, the lithium market, and we have some disciplines around it,” Mr Stausholm said.
“We are looking at various possible entries, but I am quite reluctant to come out with too big a cheque as we are also seeing pressure on project costs and difficult to follow schedules,” he said on Tuesday.
Last month Rio signed a deal with Canada’s Azimut Exploration to potentially sell a stake in its Corvet and Kaanaayaa lithium properties – close to where Patriot is exploring in the Canadian province of Quebec. Rio also entered into partnership last year with Canadian spodumene producers in the same province.
“I wouldn’t mind having lithium production in Canada, but that doesn’t mean you necessarily need to home-in on a single opportunity,” Mr Stausholm said.
Rio finalised the $US825 million ($1.2 billion) acquisition of the Rincon project – near Orocobre’s flagship Olaroz operations – in Argentina last year. The Ango-Australian mining major already produces lithium from waste rock at a Californian mine, and despite having its licences revoked in 2022, Rio has not given up hope for its $US2.4 billion plan to build Europe’s biggest lithium mine in Serbia’s Jadar Valley.
On Tuesday, Rio signed a joint venture with Rwandan lithium explorer Aterian, and last month extended a partnership with Everest Metals in West Australia, to explore their lithium deposits.
News of Albemarle, one of the world’s largest lithium miners, securing its interest sent Patriot shares on the ASX up 10.6 per cent to $1.67 on Tuesday.
The purchase follows Patriot releasing the maiden ore reserve at its flagship Corvette project in James Bay, Quebec.
Patriot told the market on Monday it was sitting on the “eighth largest” hard rock lithium reserve in the world, but that was not enough to impress Canadian or Australian investors. It has a primary Toronto Stock Exchange listing and CHESS depositary interests traded on the ASX.
On Monday, its ASX securities fell 6.7 per cent, and Canadians wiped 8 per cent off the share price in Toronto. That was reversed by news of Albemarle’s $C109 million ($123 million) purchase at $C15.29 apiece.
Patriot chief executive Blair Way said the investment would be used to ramp up development of the Corvette tenement, which must still clear hurdles including environmental and Canadian first nations permits, to supply North America and Europe buyers.
“The additional funding will allow us to more aggressively advance the Corvette property through drilling, permitting, study work and more,” Mr Way said.
The miner said on July 13 that it was seeking legal advice on an attack from an activist short seller in the US, Night Market Research, which published a report alleging the company manipulated its share price by circulating takeover rumours and delaying the results of its maiden reserve.
Patriot branded the report “misleading” and forcefully rejected claims of stock and reserve manipulation. Ahead of the explorer’s formal response to the report, Patriot chairman Ken Brinsden told The Australian Financial Review the Corvette project was “really one of the best ones globally”.
He, too, dismissed the substance of the short report, saying: “I just think some of what they have said is pretty frustrating, a bit outrageous and inconsistent with the facts we have presented to our investors.”
Mr Brinsden left the top job at Pilbara Minerals in July last year and emerged as Patriot chairman a month later.
Patriot said on Tuesday that Albemarle’s purchase meant it would own about 4.9 per cent of Patriot’s shares on a fully diluted basis, or 6.4 per cent based on Friday’s float.
Albemarle has agreed to a 12-month accord where the US giant will have the right to receive notices regarding participation in future capital raisings to maintain its ownership level.
The agreement also includes a “standstill undertaking” where Albemarle has agreed not to increase its stake beyond the aforementioned level.
Albemarle has also pledged to certain restrictions on selling shares and to vote in favour of management’s recommendations, subject to customary conditions and exceptions.
