Contemporary Amperex Technology Co., Ltd. (CATL) has suspended production at its Jianxiawo lithium mine in Yichun, Jiangxi province, following the expiration of a key mining license, according to sources cited by Bloomberg.
The halt, which began after the permit lapsed on August 9, is expected to last at least three months. CATL is reportedly in discussions with government agencies to secure a renewal but has notified affiliated refineries in Yichun of the closure. The city, often called the “Lithium Capital of Asia,” is a major hub for lithium processing in China.
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One source familiar with the matter told Bloomberg the company “failed to extend a key mining license” and is preparing for a prolonged shutdown. The move comes as Chinese authorities increase oversight of mining activities and address overcapacity concerns in several industrial sectors.
The production halt could shift market dynamics in the lithium sector. While it represents a setback for CATL, it may provide relief for lithium producers who have seen prices pressured by a persistent supply glut. Bloomberg noted that “for an industry that has been plagued by overcapacity for over two years, the suspension of production at a key link in the supply chain will be a positive development.”
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Lithium prices in China surged in 2022, with battery-grade lithium carbonate reaching RMB 590,000 ($82,130) per ton in November, up about 14-fold from June 2020 levels. Prices have since fallen sharply, with current levels around RMB 70,000 per ton. Reports last year suggested CATL’s cash production cost for lithium ore at Jianxiawo was approximately RMB 100,000 per ton, exceeding prevailing market prices at the time.
Lithium carbonate, along with iron phosphate, is a core raw material for lithium iron phosphate (LFP) batteries, which power a significant share of electric vehicles. Any prolonged disruption in Yichun’s production could tighten supply and influence battery manufacturing costs in the months ahead.