(Yicai Global) Jan. 4 -- GEM’s shares soared after the Chinese metals recycler and supplier said it will increase its stake in an Indonesian nickel salt production project to 72 percent from 36 percent, boosting the firm’s ability to supply key raw materials for lithium batteries.

GEM [SHE: 002340] rose by the daily exchange-imposed trading limit of 10 percent today to close at CNY7.69 (USD1.19), the highest in over nine months.

The Shenzhen-based company said its Jingmen GEM New Materials unit will have the right to acquire the 21 percent stake in the project held by Xinzhan International Holding, and will buy a 60 percent stake in Hong Kong Brunp Recycling, which owns 25 percent of the project.

Jingmen GEM and four partners invested USD700 million early last year to form a joint venture to produce lithium battery raw materials, including high-purity nickel sulfate, cobalt sulfate and manganese sulfate. The JV is based in the China-Indonesia Comprehensive Industrial Park in Central Sulawesi, Indonesia, and its battery-grade nickel sulfate crystal production capacity is expected to reach 150,000 tons a year.

But there has been no report on the progress of the project since then, and GEM’s announcement today did not mention it.

Xinzhan International Holding is a subsidiary of Chinese stainless steel giant Tsingshan Industry, and Hong Kong Brunp Recycling is a unit of China’s Contemporary Amperex Technology, the world’s biggest maker of power batteries for electric vehicles.

Indonesia’s laterite nickel ore reserves account for more than 10 percent of the world’s total. Tsingshan Industry has the mining rights for several nickel-rich mines in Indonesia and a stainless-steel production base in the industrial park where the project is located, according to an earlier statement.

Editor: Tom Litting