MELBOURNE (Reuters) -Rio Tinto, has made an strategy to purchase lithium producer Arcadium Lithium, the 2 events mentioned in separate statements on Monday, with out revealing any monetary particulars.

Rio’s strategy to Arcadium comes as miners are desirous to safe provides of crucial minerals wanted to energy the worldwide vitality transition and comes after weeks of hypothesis over the deal.

Reuters solely reported on Friday that the businesses had been holding talks, and Arcadium could possibly be valued at $4 billion to $6 billion or increased.

“The approach is non-binding and there is no certainty that any transaction will be agreed to or will proceed,” Rio mentioned in its assertion.

Arcadium’s market cap was $3.31 billion at Friday’s shut.

If consummated, the deal would make Rio one of many world’s largest suppliers of lithium behind Albemarle (NYSE:) and SQM. Demand for the ultralight metallic is forecast to surge later this decade from progress in lithium-ion battery use in electrical autos and shopper electronics.

Australia-based Arcadium shareholder Blackwattle Funding Companions known as the strategy “opportunistic” and mentioned that any provide of between $4 billion to $6 billion would “significantly undervalue” the lithium firm.

The latest hunch in lithium costs, which is due partially to Chinese language oversupply, has pushed Arcadium’s shares down greater than 50% since January, making it a lovely takeover goal.

“If the management do believe that the growth opportunity highlighted by the recent Investor Day is achievable, in our opinion, a sale price for LTM should be closer to $8 billion, and LTM should be willing to walk away from an opportunistic offer,” it mentioned.