(Yicai Global) June 21 -- JA Solar’s shares surged by the daily trading limit after the Chinese solar module maker said it will contribute CNY315 million (USD48.7 million) to a new high-purity polysilicon material plant.

JA Solar [SHE: 002459] closed up 7 percent today at CNY42.95 (USD6.64), after earlier gaining as much as 10 percent.

Xinte Energy, one of China’s major suppliers of the raw material used in the photovoltaic and electronics industries, has raised CNY3.44 billion (USD532 million) to build the plant, which will have an annual capacity of 100,000 tons, Beijing-based JA Solar said late yesterday. Xinte’s current polysilicon capacity is 66,000 tons a year.

The new plant will be located in North China’s Inner Mongolia Autonomous Region and will have total investment of about CNY8.8 billion (USD1.36 billion), according to a previous announcement.

Construction of solar power stations in China has boosted demand for raw materials in the industry and companies have been trying to expand capacity and secure long-term supplies. The price of crystalline silicon materials has also been rising.

JA Solar’s investment in the polysilicon plant will guarantee its long-term supply, the firm said, adding that its annual solar module output will exceed 40 gigawatts by the end of this year.

Xinte Energy will invest CNY2.81 billion in the plant, while JA Solar and another unidentified company will contribute CNY315 million each. Xinte Energy will have an 82 percent stake, while the other two investors will own 9 percent each.

JA Solar signed a deal worth nearly CNY25 billion with Xinte Energy at the end of April to buy polysilicon from next year to 2026.

Shares of Xinte Energy [HKG: 1799] rose 3 percent today to HKD13.98 (USD1.80).

Editor: Tom Litting