(Bloomberg) -- China’s Zijin Mining Group Co., already a global force in copper and gold, is stepping up its foray into lithium with the potential purchase of a Chinese producer of the battery material.

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The resource giant is in talks to buy shares in Zangge Mining Co. Ltd. that could lead to a takeover, Zijin said in a statement to the Hong Kong Exchange. Zijin has grown aggressively over the past decade through a string of acquisitions, and is aiming to be a bigger player in the expanding global lithium market.

Zangge, the latest target, is based in China’s minerals-rich western region of Qinghai and has a market value of 46.6 billion yuan ($6.4 billion) on the Shenzhen Stock Exchange. It primarily produces potash — used in fertilizer — but gets about a third of its revenue from lithium extracted from salt lakes in Qinghai.

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

Zangge is a relatively small lithium producer, producing about 9,278 tons of lithium carbonate in the first nine months of 2024. But it has plans to develop further brine projects in Tibet, where it’s also already a junior partner in Zijin’s Julong copper mine.

Zijin’s Chairman Chen Jinghe, a former geologist, has led a rapid expansion that’s carried the firm to the top ranks of global copper miners. The company began digging gold in the mountains of southeastern China in the 1980s, and it now has a market capitalization of about $57 billion in Hong Kong. The shares rose 3.4% on Friday.

The lithium push has been more recent, driven by the prospect of a decades-long demand boom for the material used in EV batteries. It’s aiming to produce up to 300,000 tons by 2028, according to a strategy document from last year, although output so far been modest.

Zijin postponed the startup of projects in Argentina and Tibet until 2025 because of weak prices and permitting delays, and it’s aiming to start output in the Democratic Republic of Congo from 2026. It also has a hard-rock mine in China’s Hunan province.

The purchase of shares in Zangge “may result in a change in control” of the target company, Zijin’s statement said. Any deal is still subject to a signed agreement and board approval, it added.

Story Continues

--With assistance from Winnie Zhu and Andrew Janes.

(Adds details throughout)

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