Investors in the ASX-listed environmental business Phoslock are riding a surging wave after the company said a new China approval for a product to treat waterways would generate demand for years to come.

Shares in the mid-cap surged 25 per cent on Monday, to close at $1.09, making it one of the best performing stocks on the ASX as huge volumes changed hands. The move added $121 million to the company's market capitalisation, which stood at $601 million at the close.

Xingyun Lake, China. Credit:

The company has a bigger market capitalisation than retailer Myer, and lithium miner Galaxy Resources.

Phoslock Environmental Technologies' product, known as phoslock, has been used in a trial at China's Xingyun Lake in the country's south-west over the past two months, in order to reduce phosphate levels in the water and boost waterway health.