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 said it has agreed to a $6.7 billion takeover of Arcadium Lithium, propelling it into the ranks of the top producers of a key commodity used in batteries for electric vehicles.