Contemporary Amperex Technology, EV battery maker, and Jiangxi regulators have paused output at the Jianxiawo lithium mine in Yichun for at least three months after a key licence expired on Aug. 9, tightening near-term supply from China’s largest lithium hub and sending Guangzhou futures up the daily limit to ¥81,000/t (~$11,260) on Aug. 11. Industry estimates peg Jianxiawo at roughly 3–6% of global mined lithium; affiliated refineries around Yichun were told to prepare for the stop while renewal talks continue.
Permit lapse triggers three-month halt
CATL notified staff of the temporary suspension after failing to secure an extension to its mining permit, according to people familiar. Traders had been flying drones over the site in recent days to check conveyor activity amid mounting speculation the licence would not be renewed on time. The company is seeking a swift renewal but is preparing for a multi-month outage, with some downstream plants briefed on curtailed feed.
Market impact and pricing
Lithium carbonate futures on the Guangzhou Futures Exchange jumped 8% to the limit, closing at ¥81,000/t ($11,260) on Aug. 11; spot and equities rallied globally as traders priced tighter Chinese supply. The most-active contract had earlier touched above ¥80,000/t ($11,120) in July before retracing to around ¥75,000/t (~$10,426) on Aug. 8–9, underscoring heightened volatility. (USD conversions use ~CNY 7.19 per $1 as of Aug. 12.)
Policy backdrop: overcapacity crackdown and Yichun scrutiny
Beijing has intensified oversight of mining and processing capacity in several sectors, with Jiangxi’s “lithium capital” under particular scrutiny after a two-year price slump and rapid project build-out. Reports flagged permit checks and operational audits in Yichun earlier this year, and separate crackdowns have hit other battery-metal producers. A prolonged Jianxiawo outage would remove a material chunk of China’s hard-rock feed, tightening raw-material availability for converters.
Supply-chain implications
The halt is a short-term boon to prices but introduces supply risk for converters concentrated around Yichun and for downstream cell manufacturers that rely on stable domestic feed. Analysts note uncertainty around the mine’s share of global supply—Bloomberg sources guided “about 3%,” while other sell-side estimates suggest nearer 6%—but agree the shock is large enough to move sentiment after months of destocking. CATL’s upstream strategy, intended to secure raw materials and manage costs, has faced margin pressure as its minerals revenue fell sharply in 2024; the outage may re-balance inventories but could also force higher-cost procurement if the pause extends.
Company Background and Market Context
CATL is the world’s largest EV-battery producer and an increasingly active upstream investor, with stakes across lithium, nickel and other inputs. Jianxiawo sits in the Yichun cluster, a fast-growing hard-rock district that fed China’s rapid cathode expansion. The suspension follows weeks of permit-renewal jitters and coincides with exchange measures to rein in speculation in lithium futures after sharp price swings. Shares of global lithium names (Albemarle, SQM and others) rallied on the news alongside Chinese producers.
Lithium is central to EV and stationary-storage batteries. Prices have rebounded from early-2025 lows but remain far below 2022 peaks, leaving project cash flows sensitive to policy shocks and permitting delays. Futures at ¥81,000/t (~$11,260) reflect a risk premium for Chinese supply, while the path from permit renewal to normalized output will dictate whether the rally endures.
