China’s Ganfeng Lithium has agreed to acquire Argentina-focused mining group Lithea for up to $962m, reported Bloomberg News citing Ganfeng’s filing to the Shenzhen Stock Exchange.

The deal comes amid efforts by the firms to secure more lithium resources to meet the surging demand for the metal on expectations of rapid demand growth for electric vehicles (EVs).

Lithea owns the Pozuelos and Pastos Grandes salt lake assets in the mineral-rich Salta province in Argentina.

The two projects may produce lithium carbonate, which is said to be a key material for EV batteries.

The transaction is subject to customary regulatory approvals.

Ganfeng, which supplies battery-grade lithium to EV makers, expects the acquisition to help strengthen “the layout of its upstream lithium resources” and its resource self-sufficiency, reported Reuters.

Lithea is a unit of LSC Lithium , which in turn is owned by oil and gas mining firm Pluspetrol Resource.

Mayer Brown acted as adviser for LSC Lithium on the sale of outstanding shares of Lithea to Ganfeng Lithium’s subsidiary GFL International .

Ganfeng already owns a stake in the Cauchari-Olaroz project in Argentina’s Jujuy province. This project is expected to have a lithium carbonate production of 40,000tpa.

A part of the ‘lithium triangle’, Argentina is looking to attract more investors to develop its mining infrastructure and reduced taxes.

As per estimates, the country holds 19 million metric tonnes of untapped lithium resources and has the world’s biggest pipeline of lithium projects, according to Bloomberg News.

Last year, Rio Tinto agreed to purchase the Rincon lithium project in the Salta province for $825m. The deal was closed in March 2022.

US-based Lithium Americas also owns a lithium project in the Salta province.