(Yicai Global) July 12 -- Ganfeng Lithium said a unit plans to pay as much as USD962 million for mining group Lithea, which owns the rights to two lithium salt lakes in Argentina, as the Chinese battery materials giant strives to secure more of the key ingredient used in electric vehicle batteries amid surging prices.

Ganfeng International Trading will buy all of Lithea and its debt from Dutch private oil and gas firm Pluspetrol Resource, its Xinyu-based parent company said in a statement late yesterday. The deal is subject to approval by Chinese regulators.

The acquisition would give Ganfeng the rights to Pozuelos and Paston Grandes, two lithium salt lake projects in Argentina's Salta province, containing 11.1 million tons of lithium carbonate equivalent. Lithea will build a plant with annual output of 30,000 tons and later expand it to 50,000 tons, Ganfeng said.

Ganfeng has been buying overseas lithium resources and enlarging its processing capacity. Last October it paid USD13.2 million for the remaining 8.6 percent of Litio Minera Argentina that it did not already own, and in May the firm started building a lithium processing plant there. It also owns lithium resources in countries such as Australia, Mexico, and Ireland, according to its website.

Amid a wider decline in Chinese stock markets today, Ganfeng’s shares [SHE: 002460] fell 0.7 percent to CNY100.48 (USD14.92) each in Shenzhen, while its Hong Kong-listed stock [HKG: 1772] dropped 2.4 percent to HKD75.85 (USD9.66).

Last year, Ganfeng’s net profit soared over five times to CNY5.2 billion (USD820 million) as operating revenue more than doubled to CNY11.2 billion (USD1.7 billion), mainly because of higher lithium salt prices. In the first quarter of this year, net profit skyrocketed 640 percent from a year earlier to CNY3.5 billion. Revenue jumped 234 percent to CNY5.4 billion.

Editor: Futura Costaglione