The plant will demonstrate at industrial scale a new spodumene concentration process that provides lithium oxide grades and recoveries well above the industry average.
The process was developed by researchers at Rio's Critical Minerals and Technology Centre and tested on spodumene ore samples from various countries.
Rio said it offered the environmental benefit of not using chemical products and generating only dry, inert residues.
"Rio Tinto is exploring new, sustainable ways to extract battery materials for the energy transition," RTIT Managing Director Stéphane Leblanc said.
"We are seeing strong interest in the market for a North American supply of spodumene concentrate to support production of lithium batteries.
"Our demonstration plant will allow us to further validate the innovative spodumene concentration process developed at our Critical Minerals and Technology Centre as we consider moving to commercial scale production."
The demonstration plant will test ore from various local suppliers, including ASX-listed Sayona Mining.
