(Yicai Global) Nov. 19 -- Shares in GCL Energy Technology jumped by as much as 4.5 percent today after the Chinese provider of new energy services said it will buy a majority stake in a bankrupt mining company that owns the rights to develop a lithium salt mine in southwestern China so as to ensure the supply of raw materials.

GCL Energy’s share price [SHE:002015] closed up 2.82 percent at CNY14.95 (USD2.12). Earlier in the day it hit CNY15.20.

GCL Energy will acquire equity and creditors’ rights in Yajiang Snowway Mining Development in order to carry out different types of business transactions and to realize the bankruptcy restructuring of the miner, the Suzhou, eastern Jiangsu province-based company said yesterday, citing a meeting held by the board of directors on Nov. 11. No details were given about the investment amount.

Snowway Mining, which was declared insolvent by a local court on Oct. 11, owns the development rights to a lithium ore mine in southwestern Sichuan province that has estimated reserves of 18.14 million tons of lithium ore, including 2.24 million tons of lithium oxide. The ore grade is around 1.34 percent and the mineral deposits are located no deeper than 200 meters.

Gaining a controlling stake in Yajiang, Sichuan province-based Snowway Mining will help GCL Energy expand its business upstream towards electric car battery raw materials, it said. This will ensure the company’s raw materials supply and reduce costs as the price of lithium salts soars.

In May, GCL Energy said that it planned to expand upstream. And in August it said it is preparing to raise CNY4.5 billion (USD638.1 million) by issuing convertible bonds, about one third of which would be used to build a battery-grade lithium carbonate plant.

Editor: Kim Taylor