Rio Tinto
$RIO (-0,87 %) examines gallium extraction in Canada

Global mining company Rio Tinto is exploring the feasibility of extracting gallium, a critical mineral, at its aluminum refinery in Saguenay, Quebec. This initiative is part of a research and development program to strengthen the North American strategic minerals supply chain.

The company has announced plans to build a demonstration plant in Saguenay that could produce up to 3.5 tons of gallium per year if the technology is successfully developed. The Quebec government has pledged to support this demonstration phase with up to 7 million Canadian dollars. If scaled up commercially, the plant could potentially produce 40 tons of gallium annually, equivalent to 5-10% of current global production. This expansion is consistent with Rio Tinto's robust operating efficiency, reflected in healthy EBITDA (earnings before interest, taxes, depreciation and amortization) of $19.64 billion and strong cash flows that adequately cover the company's moderate debt.

Gallium is an essential component in the manufacture of integrated circuits, which are essential in various advanced technologies such as smartphones, electric vehicles and laptops. The development of this project is seen as a strategic move to strengthen the supply of a critical mineral for numerous sectors.

Jérôme Pécresse, CEO of Rio Tinto Aluminum, expressed his gratitude for the significant financial commitment from the Quebec government and emphasized the company's commitment to this landmark project. Maïté Blanchette Vézina, Quebec's Minister of Natural Resources and Forestry, praised the project's alignment with the government's vision of a more circular and greener economy. The Honorable François-Philippe Champagne, Canada's Minister of Innovation, Science and Industry, highlighted the collaboration between government and industry to position Canada as the global supplier of choice for critical minerals.

In North America, Rio Tinto already produces a variety of critical minerals, including scandium, tellurium and molybdenum, which are used in applications ranging from aluminum alloys to solar cells and steel alloys. The company continues to explore the extraction of new materials from its operations as part of ongoing R&D initiatives.