(Yicai) Jan. 19 -- Shares of Chengxin Lithium Group gained after China’s natural resources ministry announced the discovery of the largest pegmatite lithium deposit in Asia, in which the Chinese company has indirect mining rights.

After surging by its 10 percent daily trading limit shortly after the morning open, Chengxin [SHE: 002240] ended the day 5.6 percent higher at CNY23.41 (USD3.28) a share in Shenzhen.

Chengxin, which supplies BYD and Contemporary Amperex Technology with battery materials, told Yicai that it is pushing forward the mining approval process for the newly discovered 1-million-ton lithium ore deposit.

The deposit was found in Yajiang, Sichuan province, media reports said yesterday, citing the Ministry of Natural Resources. It has proven reserves of 61.1 million tons of lithium ore, including 990,000 tons of lithium oxide, according to data published by the Sichuan Mineral Resources and Reserves Evaluation Center last August.

Huirong Mining Group, which is 85 percent owned by Qicheng Mining Group, holds the exploration rights. Chengdu-based Chengxin paid CNY500 million (USD69.5 million) in December to raise its stake in Qicheng to 43.2 percent from 38 percent.

The discovery can boost Chengxin's self-sufficiency in raw materials, but the expected earnings will depend on market conditions and the timeframe for mining approval is unpredictable, employees said.

Sichuan boasts abundant lithium ore resources, making up 57 percent of China's total. The ore reserves with mining rights now stand at 158 million tons.

Editor: Emmi Laine