Rio Tinto Group RIO announced that it is assessing the potential for extracting and valorizing gallium from the bauxite processed in its Canada alumina refinery in Saguenay-Lac-Saint-Jean. This is part of Rio Tinto’s research and development program, which aims to solidify the North America supply chain for critical and strategic minerals .
Details on RIO’s Gallium Extraction Exploration
Rio Tinto intends to develop a demonstration plant for extraction in Saguenay, following the completion of the preliminary phase of technological development. RIO expects this demonstration plant to produce up to 3.5 tons of gallium per year. RIO estimates a commercial-scale operation to be able to extract up to 40 tons of gallium per year, representing 5-10% of current world gallium production.
The project has gained the support of the government of Quebec, which has committed up to C$7 million (around $5 million) for the demonstration phase.
Primary gallium plays a crucial role in various key sectors. Its main application is in the production of integrated circuits, which are essential components in emerging technologies, such as high-performance radar, smartphones, electric vehicles and laptops.
Rio Tinto’s Another Investment Plan
The company announced that it would invest $2.5 billion in its first commercial-scale lithium operation, the Rincon project, in Argentina. This move is in sync with Rio Tinto’s goal to build a world-class battery material portfolio.
Rincon, a long-life asset, is designed to produce 60,000 tons of battery-grade lithium carbonate per year. This includes a 3,000-ton starter plant and a 57,000-ton expansion plant. The mine's ore reserves are 60% higher than the company projected at the time of acquisition. It is expected to operate in the lowest quartile of the cost curve.
The project employs direct lithium extraction technology. This process promotes water conservation, lowers waste and yields lithium carbonate more consistently than other processes.
Rio Tinto expects the mine life of Rincon to be 40 years. The mine's first production is scheduled for 2028, following a three-year ramp-up to full capacity. This is expected to result in major job creation and economic opportunity for local firms.
RIO Stock’s Price Performance
In the past year, shares of Rio Tinto have lost 8.6% compared with the industry’s 12.2% decline.
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Rio Tinto’s Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks from the basic materials space are CF Industries Inc. CF, Carpenter Technology Corporation CRS and Ingevity Corporation NGVT. CF sports a Zacks Rank #1 (Strong Buy) at present, and CRS and NGVT carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CF Industries has an average trailing four-quarter earnings surprise of 10.3%. The Zacks Consensus Estimate for CF’s 2024 earnings is pegged at $6.32 per share. CF’s shares gained 20.6% last year.
Carpenter Technology has an average trailing four-quarter earnings surprise of 14.1%. The Zacks Consensus Estimate for CRS’s fiscal 2025 earnings is pegged at $6.61 per share. Its shares skyrocketed 162.7% last year.
Ingevity has an average trailing four-quarter earnings surprise of 95.4%. The Zacks Consensus Estimate for NGVT’s 2024 earnings is pegged at $2.55 per share. Its shares gained 25.7% last year.
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