Rio Tinto is muscling in on the lithium market after a precipitous price collapse for the battery metal, betting it can build a portfolio of huge, low-cost mines that will outlast weaker rivals.

The miner has been looking to build a lithium business for years, and its planned $6.7-billion takeover of Arcadium Lithium will immediately establish it as one of the world’s top suppliers. The company is planning to invest heavily in further expansion ahead of an anticipated 2030s demand boom.

But as he outlined the rationale for the deal on Wednesday, Rio CEO Jakob Stausholm stressed he’s not necessarily betting that lithium prices are heading back to the sky-high levels seen when electric-vehicle sales took off in recent years. Rather, in an environment where low prices are forcing some suppliers to shut down, the appeal lies in the fact that Arcadium is one of the lowest-cost producers in the world.

Rio’s focus on large-scale, low-cost mining has proven hugely successful in much larger markets like iron ore. That business has reliably pumped billions of dollars in profit for Rio shareholders even during periods of weak prices and oversupply. Those conditions tend to flush smaller higher-cost producers out of the market, leaving Rio to reap the rewards when prices rebound.

“One thing that is very important — that’s the mantra of Rio Tinto through decades — is we believe in the cost curve,” Stausholm said. “I do think it’s going to be very difficult to project the lithium price, but if you think about it, the lower it goes in the next short period of time, the higher it will have to go later on.”

An ongoing price slump has seen lithium producers curtailing output, suspending expansion projects and reining in capital expenditures. With analysts expecting the market to remain in a surplus for the next couple of years, the bearish sentiment is also weighing on the stock prices of producers such as Arcadium and Albemarle.

The acquisition will make Rio the No. 2 lithium producer with the largest resource base, according to a team of Citigroup analysts including Paul McTaggart and Kate McCutcheon.

Arcadium’s attraction for Rio also lies in chemical expertise, with the former being one of the few global players with capabilities to produce battery-grade lithium products used in EVs, according to Citigroup. It is also one of just two lithium-hydroxide producers in the US.

Arcadium’s exposure to three top-tier resources in Argentina is another attraction for Rio, the analysts wrote in an October 9 note.