“The market fundamentals for battery-grade lithium carbonate are strong, with lithium demand forecast to grow 25-35 per cent per annum over the next decade with a significant supply-demand deficit expected from the second half of this decade,” the company said.

Completion of the $US825 million ($1.1 billion) acquisition of Rincon from private equity group Sentient Equity Partners comes as another of Rio Tinto’s biggest lithium projects, the Jadar lithium mine in western Serbia, remains in doubt. In January, the Serbian government revoked the company’s licences to develop the $US2.4 billion mine, in a shock decision coinciding with escalating protests over the project’s potential environmental impacts and a deterioration of relations between Serbia and Australia because of the deportation of unvaccinated tennis star Novak Djokovic.

Glyn Lawcock, head of mining research at Barrenjoey, last month noted Rio Tinto was optimistic about lithium’s outlook and was focusing on early-stage entry projects including Rincon and Jadar rather than developed assets.

“Rio is positive on the outlook for lithium, with demand seen 10 times 2020 levels by 2030,” he said.

In October, Rio unveiled a major strategic shift including spending $US7.5 billion to halve its carbon footprint by 2030 and earmarking $US3 billion for new investments in minerals considered vital to driving the global shift towards carbon neutrality.