Zhejiang Huayou Cobalt (SHA:603799) will purchase Australian miner Atlantic Lithium (ASX:A11) and its lithium assets in Ghana for about $210 million.

The purchase comes as the war in Iran could raise demand for lithium, a key component in electric vehicle batteries, Nikkei Asia reported separately on Friday.

Huayou will purchase the shares through a scheme of arrangement of $0.25486 per share, equivalent to 26.6% premium to Atlantic Lithium's last close of AU$0.280 per share, according to a filing with the Australian Securities Exchange on Thursday.

South African company Assore International, Atlantic Lithium's largest shareholder, will vote in favor of the proposal.

Atlantic Lithium, together with Elevra Lithium (ASX:ELV), control the Ewoyaa lithium mine in Ghana, which is expected to produce 3.6 metric tons of spodumene concentrate, a high-purity lithium aluminum silicate, over a mine life of 12 years, according to a previous announcement.

The purchase "acknowledges Ewoyaa as a highly attractive hard rock lithium asset capable of serving the growing global electric vehicle and energy storage markets," Atlantic Lithium CEO Keith Muller said.

"The acquisition of the Ewoyaa Lithium Project complements our existing battery metal mining operations in Africa and represents a logical transaction for Huayou as we continue to build a new energy materials business," Chairman Chen Hongliang said.

While cobalt is Huayou's main product, the Chinese miner also produces lithium, with sales rising 12% to 3.44 billion yuan, Nikkei reported.

Huayou is the owner of the Arcadia lithium mine in Zimbabwe, the newspaper said.

Shareholders in the Australian mining company will vote on the scheme in November, with the transaction expected to close in December, according to Atlantic Lithium.