(Bloomberg) -- Zijin Mining Group Co. is making its first foray into lithium -- a key raw material for batteries -- with a C$960 million ($770 million) purchase of Neo Lithium Corp.
The major Chinese gold and copper producer agreed to buy all outstanding shares of Neo Lithium for C$6.50 each in cash, according to an announcement on Friday. The Canadian miner's core project is a high-grade brine operation in Argentina.
Zijin's venture into lithium highlights the intensifying race across China's supply chain to lock in supply as the energy transition boosts demand and spurs a shortfall. The world's biggest maker of electric-vehicle batteries, Contemporary Amperex Technology Co., will acquire Canada's Millennial Lithium Corp. after trumping an offer from Ganfeng Lithium Co. CATL also holds an 8% stake in Neo Lithium.
Read also: BNEF says China lithium carbonate prices soared to record highs
Zijin shares jumped as much as 8.8% in Hong Kong on Monday, and are up 17% this year.
Neo Lithium's brine project is “world class” and “is a good start for Zijin to enter the field of new energy minerals,” analysts at Citigroup Inc. wrote in a note.
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