Zijin Mining Group, an acquisitive Chinese copper and gold producer, has agreed to buy around a quarter of a domestic miner for $1.9-billion as it seeks to expand into lithium.

The mining giant agreed to pay 13.7-billion yuan for a 24.8% stake in lithium and potash producer Zangge Mining Co., it said in an exchange filing late Thursday. The investment, it’s single biggest ever, would give it “controlling power” in the local miner, Zijin said, without providing further details.

Its shares rose as much as 1.6% in Hong Kong on Friday.

Zijin’s interest in the electric vehicle battery metal comes after a decade in which it has expanded aggressively through a string of international deals, making it one of the world’s biggest copper miners. It began digging gold in the mountains of southeastern China in the 1980s, and now has a market capitalization of about $57-billion.

Lithium’s crash since late 2022 — with prices slumping nearly 90% — has hammered listed producers and fueled a spurt of dealmaking. Rio Tinto Group, the world’s second-biggest miner, agreed to buy Arcadium Lithium last year for $6.7-billion.

Zangge, which had already invested in the Julong copper mine in Tibet with Zijin, is based in the mineral-rich western region of Qinghai and had a market value of 46.6-billion yuan ($6.4 billion) on the Shenzhen Stock Exchange before the announcement. It’s mainly a producer of potash — used in fertilizer — but gets about a third of its revenue from lithium extracted from salt lakes.

“This deal came as a surprise but makes sense” as the companies have built a solid relationship since the Julong copper mine acquisition in 2020, Jefferies analysts including Shuhang Jiang said in a note. Zangge has investments in three yet-to-be-developed lithium brine deposits, probably the main reason for Zijin’s purchase, and the deal will also give it a bigger, controlling stake in Julong, they said.

Zangge currently has capacity to produce 10 000 t of battery-grade lithium carbonate a year, Zijin said in the filing. Phase two of the Julong copper mine in Tibet is likely to start at the end of this year, with production attributable to Zangge expected to be between 92 000 t and 108 000 t. That could rise to 180 000 t in phase three.

The acquisition will enhance Zijin’s copper, lithium and potash resources, and promote operational management efficiency at Julong and speed up expansion there, according to the filling. After the transaction, a new board of nine members will be appointed at Zangge, with Zijin will having the right to recommend four non-independent directors and one independent director.