Australian nickel and gold miner IGO Ltd said on Wednesday it would invest $1.4 billion in a local unit of China's Tianqi Lithium Corp for a stake in the Greenbushes lithium mine, as it looks to cash in on the lithium rush.

IGO would take a 49% stake in Tianqi Lithium Energy Australia, giving it 24.99% ownership in Greenbushes - the world's largest hard-rock lithium mine - and a 49% holding in Tianqi's Kwinana lithium processing plant, both in Western Australia.

"Both Greenbushes and Kwinana are world-class assets with attractive growth profiles that together provide the platform for building a global lithium business," IGO Chief Executive Peter Bradford said.

The growing market for batteries used in electric vehicles (EV) and other products has increased demand for lithium across the globe, and has lithium miners raising funds and scooping up projects on likely growth in demand for the metal.

Earlier in an exchange filing, debt-laden Tianqi, one of the world's top producers of lithium chemicals used in EV batteries, said it would use the proceeds from the stake sale to repay part of its $1.88 billion in loans set to mature near the end of December.

IGO intends to fund the acquisition via new loans worth A$1.1 billion ($815 million) and a capital raising of up to A$766 million, it said in an exchange filing.

It expects the deal to be earnings accretive from fiscal-year 2023.