Lithium prices and mining stocks around the world soared this week after Chinese battery giant Contemporary Amperex Technology (CATL) (SZSE:300750,HKEX:3750) suspended operations at one of the world’s largest lithium mines.
The halt at the Jianxiawo lepidolite mine in Jiangxi province’s Yichun city, a hub for China’s lithium production, came after the mine’s permit expired on August 9.
CATL confirmed the closure on Monday (August 11), saying it is seeking a permit extension but offering no timeline for resuming output. The shutdown will last at least three months, according to people familiar with the matter cited by Bloomberg.
The mine produces around 65,000 tons of lithium carbonate equivalent (LCE) annually, equivalent to roughly 6 percent of global output, according to estimates.
That makes the stoppage one of the most significant supply interruptions in recent years for a metal central to electric vehicle (EV) batteries, grid storage, and consumer electronics.
The most-active lithium carbonate futures contract on the Guangzhou Futures Exchange (GFEX) jumped the daily limit of 8 percent on Monday (August 11), closing at 81,000 yuan (US$11,280) per ton for November delivery.
Meanwhile, spot prices in China also climbed, with Asian Metal reporting a 3 percent increase to 75,500 yuan per ton, the highest margin since February.
On the Liyang Zhonglianjin E-Commerce platform, November delivery prices surged over 10,000 yuan to around 85,500 yuan per ton.
Chandler Wu, senior analyst for battery raw materials at Fastmarkets, estimated that the shutdown would cut about 5,000 tons of LCE from China’s monthly output.
Market sentiment had been building for weeks amid speculation the mine’s license might not be renewed. By Wednesday, contracts on the GFEX were already posting sharp gains, with sellers in the spot market pushing up offers in line with futures prices.
Global mining stocks rally
The supply shock sent lithium miners’ shares higher from Sydney to New York.
In the US, Albemarle (NYSE:ALB) jumped more than 15 percent, Lithium Americas (NYSE:LAC) by 13 percent, and Chile’s SQM (NYSE:SQM) by 12 percent.
Australian producers saw similar gains: Pilbara Minerals (ASX:PLS,OTC Pink:PILBF) climbed up to 20 percent, Liontown Resources (ASX:LTR,OTC Pink:LINRF), surged 25 percent, and Mineral Resources (ASX:MIN,OTC Pink:MALRF) advanced 14 percent.
Analysts say the suspension may be linked to Beijing’s “anti-involution” campaign — an initiative aimed at curbing overcapacity and promoting more sustainable production across industries.
The policy theme has recently swept China’s financial markets and affected sectors from steelmaking to e-commerce and EVs.
China has been the world’s top processor of lithium for years. CATL, the world’s largest battery maker, has also aggressively invested in raw material supply chains to secure long-term access to critical minerals like lithium, nickel, and cobalt.
That vertical integration has helped China dominate the global EV market, but it has also contributed to oversupply concerns in the lithium sector.
CATL emphasized that the Jianxiawo shutdown would have “little impact” on its overall operations.
Even so, traders warn that the effects could be far-reaching if the suspension extends beyond Jianxiawo. Local authorities in Yichun have reportedly asked eight other miners to submit reserve reports by the end of September after audits revealed non-compliance in registration and approvals.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.