Automaker BYD has acquired an 18% stake in Zhabuye Lithium for CNY201.24m (US$29.9m). Zhabuye Lithium is based in the Shigatse, Tibet, and also produced boron and salt.

BYD's board said in a stock exchange statement it "believes that this equity transfer will further enhance the competitiveness of the group’s rechargeable battery business".

Zhabuye Lithium owns 20-year exclusive mining rights for the Zhabuye salt lake, the biggest lithium mine in China. The price of the deal represented about 2.6 times Zhabuye Lithium's book value, analysts told Reuters.

In 2008, BYD bought a high-grade silicon ore mine in Shangluo, in the western province of Shaangxi, to extract solar-grade polysilicon.

JP Morgan analyst Charles Guo said BYD's vertical integration approach could reduce costs of lithium ferrous phosphate, which accounts for 40% of overall electric car battery costs.