China’s Tianqi Lithium Corporation this week agreed to buy Australian lithium mining company Essential Metals in a deal that was expected to vastly increase its lithium reserves, according to local reports.

Tianqi is a global producer of lithium and supplies a significant proportion of the lithium for Chinese EVs.

The company agreed to pay AUD136m (US$94m) to acquire the Sydney listed mining exploration company through Tianqi Lithium Energy Australia (TLEA), its existing Australian joint venture with local miner IGO. The bid price was 45% higher than Essential Metals’ closing share price the previous day.

TLEA owns a majority stake in Greenbushes, one of the world’s largest lithium mines located in Western Australia, and also operates a battery grade lithium hydroxide refinery in the state.

The company is particularly interested in Essential Metals’ undeveloped Pioneer Dome project in Western Australia, which has estimated reserves of more than 100,000 tonnes of lithium.

The Pioneer Dome mine was not expected to become productive until well into the second half of this decade but Tianqi, with its strong capital position and experience, will likely speed up development. Lithium prices in China have soared over the last two years as EV demand continues to surge and also due to limited supply of the mineral.

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IGO acting CEO Matt Dusci said the deal also “provides an opportunity to accelerate lithium exploration to bring new resources to production”.