Rio may need to pay over 5 bln, investors and analysts say
Bottomofthecycle play is good timing for Rio Tinto
U.S.listed shares of Arcadium up 40 on Monday

Oct 7 Reuters Rio Tinto is in talks to buy lithium producer Arcadium, with the global miner looking to pounce following a slump in prices for the ultralight metal used to make electricvehicle batteries.

A deal would turbo charge Rio39;s rise to become one of the largest producers of lithium behind Albemarle and SQM . Reuters exclusively reported on Friday that the companies had been holding talks and that Arcadium could be valued at 4 billion to 6 billion or higher.

The approach was confirmed by both parties on Monday in separate statements that did not offer financial details and declined further comment. It follows a sharp slump in lithium prices that had dragged Arcadium39;s shares down more than 50 since January.

Arcadium39;s extensive lithium reserves across four continents, as well as its focus on lithium alone, rather than fertilizer or other products like some of its rivals, could prove an attractive prize for Rio. From Arcadium39;s perspective, Rio39;s large balance sheet would allow those lithium assets to be developed in time to meet an expected surge in global demand next decade.

It was unclear whether any deal could be structured to primarily include cash, stock, or a mixture of both, but a stock transaction could entice Arcadium shareholders anxious about recent market weakness.

Australian shares…