Rio said in a statement it had approached the company regarding the potential "non-binding" acquisition.
"There is no certainty that any transaction will be agreed to or will proceed," it said.
Arcadium shares surged 46 % to their highest since June.
Rio Tinto and Arcadium Lithium said they would not comment further.
If the deal goes ahead, it would transform Rio Tinto into the world's third-largest lithium supplier.
But the lithium industry is struggling with an oversupply and falling electric vehicle sales, pushing prices down and leading mines around the world to shut or scale back production.
Arcadium Lithium announced earlier this year it was mothballing a mine in Western Australia, citing low prices.
Australia is the world's biggest supplier of lithium, which is used in a variety of products including hybrid and electric car batteries, laptops and phones.
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