Key Tesla battery supplier Contemporary Amperex Technology has won exploration rights to a lithium clay deposit in China, as surging demand for electric cars fuels a race to secure supplies of raw materials.

CATL, as the company is better known, bid 865-million yuan ($135-million) for the exploration rights to the deposit, which is estimated to contain about 2.66-million tons of associated lithium metal oxide, it said in a statement on Thursday.

An index of global lithium prices compiled by Benchmark Mineral Intelligence surged 280% in 2021 and another 127% in the first quarter as supply is squeezed by booming demand for EVs.

On Tesla’s quarterly earnings call Wednesday, CEO Elon Musk appealed for more investment in lithium mining, saying it is the “fundamental limiting factor” for EV adoption worldwide.

“CATL will speed up the exploration and development of lithium mineral resources and increase the supply of lithium in a bid to bring the prices of lithium related raw materials back to a reasonable level,” the company said in the statement.

The Ningde, Fujian-based company said its subsidiary, Yichun Contemporary Amperex Resources Ltd., won the rights for the deposit, which covers an area of 6.44 km² in the eastern Chinese province of Jiangxi.

The win builds on an agreement CATL signed with the Yichun municipal government to jointly construct a new lithium-ion battery production base to better coordinate across the EV supply chain.

CATL last week announced it was partnering with State-owned Indonesian firms in a $6-billion project covering nickel mining, battery materials, manufacturing, and recycling, in a further effort to secure a wider array of base metal resources for battery production. Rival LG Energy Solution said days later it was leading a consortium in a non-binding battery value-chain pact, without specifying any financial information.