Lithium production at Yichun mine by CATL temporarily ceases, causing a surge in the stocks of rival lithium producers.
In the heart of China's Jiangxi province, CATL, a significant player in the global battery market, has temporarily halted production at its Yichun lithium mine. The mining permit for the Jianxiawo project, a crucial source of lithium, expired on August 9, 2025, necessitating the suspension until a renewal is approved.
This development, reported by Bloomberg yesterday, has sent ripples through the lithium industry, which has been under prolonged price pressure. The suspension is expected to last at least three months, but could extend further depending on regulatory approvals.
The Jianxiawo mine contributes approximately 3% of the projected global output for 2025, producing about 46,000 tons of lithium carbonate equivalent annually. This halt in production, while regulatory compliance, also reflects Beijing's efforts to curb overcapacity in the EV battery and lithium sectors.
Despite concerns about supply stability and the subsequent rise in lithium prices, the impact on electric vehicle costs is expected to be limited in the short term. This is due to the diversified supply chains among manufacturers, ensuring a degree of resilience in the face of such disruptions.
CATL has already initiated the application process for renewal to resume production as soon as possible. Meanwhile, production at other lithium mines in Yichun continues uninterrupted.
The suspension of production at CATL's Yichun lithium mine has had a notable effect on lithium producers' shares. Shares of companies like Tianqi Lithium in Hong Kong have surged, with Tianqi Lithium rising nearly 11 percent. CATL's shares, however, have experienced a more modest rise of 1.5 percent in Hong Kong.
As of press time, China's most active lithium carbonate futures have risen by 8 percent to RMB 81,000 ($11,280) per ton. The spot prices for lithium carbonate in China are currently around RMB 70,000 per ton.
This news comes at a time when China's EV industry is rapidly developing, causing lithium prices to rise significantly within the country. The article, titled "Lithium", provides valuable insights into this dynamic landscape, offering a comprehensive look at the factors influencing the battery market.
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