Tesla, NIO Supplier CATL Said To Consider Buying Stake In Miner To Secure Supply Of Battery Metals

China’s Contemporary Amperex Technology Co. Limited or CATL, a battery supplier to Tesla Inc. TSLA and Nio Inc. NIO, is exploring acquiring a nearly 10% stake in Chinese miner Jinchuan Group International Resources Co., Bloomberg reported Wednesday.

What Happened: CATL could offer to pay more than one-and-a-half times the Hong Kong-listed Jinchuan’s share price, as per the report that cited people with knowledge of the matter.

Jinchuan operates copper and cobalt mines in the Democratic Republic of Congo. The company’s shares are surging as much as 36% in Thursday’s trading session in Hong Kong following the news.

Meanwhile, CATL reported a 131.5% year-over-year surge in net profit for the first half of the year at RMB 4.48 billion ($690 million), according to a report by cnEVpost.

Revenue for the period jumped 134.1% percent year-over-year to RMB 44.08 billion. The results beat analysts’ expectations.

See Also: Tesla Supplier CATL Said To Be Building Manufacturing Base In Shanghai — Home To EV Maker's China Gigafactory

Why It Matters: CATL’s proposed acquisition of a minority stake in Jinchuan highlights the efforts by the world’s biggest EV battery maker to secure supplies of key battery materials.

The battery is the key component of an EV as it accounts for roughly 30% of the cost. The race to procure raw materials for EV batteries is intensifying amid the growing global demand for EVs.

CATL’s rival, South Korea-based LG Energy Solution, said earlier this month that it has reached a six-year deal with Australia Mines Limited for the stable supply of key battery materials - cobalt and nickel.

Price Action: Tesla shares closed almost 0.4% higher in Wednesday’s trading at $711.20.

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