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Shares in lithium explorer and developer Bacanora Lithium (LON:BCN) jumped as much as 38% to 61.9p on Thursday after China’s Ganfeng Lithium, one of the world’s top producers of the battery metal, for up to 190 million pounds ($264.5 million).

The deal, which values Bacanora at up to £267 million, comes as soaring lithium prices have triggered a wave of deals in the sector, including the recent mega-merger of Australia’s Galaxy Resources (ASX:GXY) and Orocobre (ASX:ORE).

Ganfeng, which in February announced it was rising its stake in Bacanora to 28.88% from 17.41%, will acquire the remaining shares at 67.5 pence each. The unofficial offer represents a nearly 50% premium on Bacanora’s Wednesday’s close.

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The increase in Ganfeng’s stake to 28.88% is expected to complete shortly, the companies .

Bacanora’s independent directors said the offer was attractive, adding they plan to recommend it once it becomes a formal proposal, which requires approval from the Chinese authorities.

Prices for lithium in China have jumped more than 100% so far this year, according to Benchmark Mineral Intelligence on the back of an expected demand increase from the electric vehicles (EVs) sector.

Ganfeng, which already has a 50% stake in Bacanora’s Sonora project in Mexico, holds interests in mines in Australia, Argentina and Canada and around 70,000 tonnes of lithium carbonate equivalent of annual conversion capacity in China.

The Sonora mine, expected to begin production in 2023, will produce 35,000 tonnes of lithium per year once at full tilt.

An International Energy Agency (IEA) report published Wednesday recommended governments start stockpiling battery metals, noting that lithium demand could increase 40-fold in the next 20 years. IEA executive director Fatih Birol said this would become an “energy security” issue. China dominates lithium processing, while mine supply largely comes from Chile and Australia.