(Bloomberg) -- Rio Tinto Group has made an approach for Arcadium Lithium Plc, the two sides said on Monday, confirming the latest takeover proposal in a sector turning its attention back to growth, as major miners scramble to increase their exposure to energy-transition metals.

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The world’s second-largest miner did not provide the financial details of its preliminary move but, if it moves ahead, a swoop for the battery-metal producer could shape up to be its most significant acquisition in well over a decade.

Large miners have been returning to takeovers and landmark investments, but with caution, given poorly timed and ill-conceived deals during the last commodities boom that left the companies — and their shareholders — dealing with billions in writedowns. BHP Group’s bid for Anglo American Plc earlier this year gripped the sector until the world’s largest miner walked away in May.

Australian-listed depository receipts for Arcadium jumped as much as 50% in early trading, the most since listing in December. Trading volumes were thin, with a Sydney holiday. Rio Tinto shares were down 1.6% at around A$122 at 2:50 p.m. Sydney time.

Arcadium — one of the world’s largest lithium producers, with operations in Argentina, China, Canada and Australia — also did not elaborate on the bid. Some of its investors, however, have expressed concern over the opportunism of Rio’s timing. With a market cap of $3.3 billion, Arcadium is currently worth half what it was at the start of the year, when it was formed through the merger of Allkem Ltd. and Livent Corp.

Lithium mining stocks have languished since the start of the year as oversupply and weaker demand from electric-vehicle makers drag down prices of the key battery material. The spot price for lithium carbonate in China is down more than 85% from its peak in 2022.

Arcadium has also underperformed many of its peers, fueling speculation that it could become a target for bargain-hunting majors.

“Arcadium offers Rio Tinto a mix of vital characteristics that is difficult to replicate with other lithium companies,” said YueJer Lee, Singapore-based fund manager at Arcane Capital VCC, which owns shares in Arcadium Lithium. “It may be unwilling to accept any offer below US$5 billion, in my mind, given that they can self-fund their expansions through the decade, albeit at a slower pace.”

He added the company’s geographic and geological diversity — and its future scale — would be difficult to find elsewhere.

“This speaks to what Rio might be looking for - growth potential across multiple jurisdictions. And the operational knowledge embedded in Arcadium across brine and spodumene will help Rio grow its own capabilities that much quicker, too,” Lee said.

In a letter to Arcadium’s board, another investor, Blackwattle Investment Partners, said a deal would “require a significant premium to realize fair valuation for the business.”

“The timing of this potential sale could not be at a more value destructive period for shareholders,” Blackwattle portfolio managers Tim Riordan and Michael Teran wrote, adding that the global lithium market appears to have bottomed and any sale price should be near $8 billion.

Rio has been more cautious to return to the M&A fray than some of its peers. But Rio Chief Executive Officer Jakob Stausholm said at the company’s half-year earnings in July that the current price environment was suitable for lithium acquisitions.

“It’s more attractive to look at lithium assets now than it was two years ago,” Stausholm said at the time. However, he added that there was “many other criteria than just price.”

Citigroup Inc. had suggested Rio should buy Arcadium earlier this year. The miner was trading “well below replacement value” and was cheaper to acquire than build a new portfolio of quality lithium assets, analyst Paul Taggart wrote at the time.

“For companies looking for scale, first quartile costs (brine) and chemical expertise positioned for IRA tailwinds, buying Arcadium could be more economical than trying to discover and develop chemicals capability,” Taggart said.

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--With assistance from Matthew Burgess and Annie Lee.

(Writes through with details)

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