Rio Tinto has agreed to buy U.S. based Arcadium Lithium for $6.7 billion, it said on Wednesday, a deal that will catapult it to become the world's third largest miner of the metal used in electric vehicle batteries.

Rio Tinto Group’s takeover offer for Arcadium Lithium Plc has won approval, boosting the world’s second-biggest miner’s bid to become a major producer of the crucial battery material.

Rio Tinto will be acquiring Arcadium in an all-cash $6.7 billion deal that would cement it as one of the world's top lithium producers.