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 electric-vehicle batteries. A deal would turbo charge Rio's rise to become one of the largest producers of lithium behind Albemarle and SQM.

Arcadium Lithium shares jumped in premarket trading Monday after it confirmed that it has been approached about a potential acquisition by mining giant Rio Tinto.

Shares of some lithium companies surged after Rio Tinto Group made an approach for Arcadium Lithium Plc. Lithium stocks have struggled amid excess supplies and weak demand for the key battery metal used in electric vehicles. The spot price for lithium carbonate in China is down more than 85% from its peak in 2022.