CATL, a China-based battery manufacturer, has announced the suspension of operations at one of its lithium mines in Yichun, Jiangxi province, due to an expired licence, according to a Reuters report.
The company is reportedly actively seeking to renew the licence to resume production promptly.
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CATL’s Yichun mine is capable of producing more than 46,000 tonnes per annum of lithium carbonate equivalent, around 3% of the projected global lithium output for 2025.
The stoppage at the mine marks the first publicly known suspension in the region.
Following the announcement, lithium carbonate futures on the Guangzhou Futures Exchange surged by 8%, hitting the price limit.
Shares of lithium miners in China and Australia also experienced significant gains, with some stocks soaring by more than 10%.
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By GlobalDataChinese lithium mining companies saw their share prices rise, with Ganfeng Lithium’s shares increasing by more than 4% and Tianqi Lithium’s shares jumping by around 11%.
In Australia, Liontown Resources led the gains with a 25% surge, while other miners such as Pilbara Minerals, IGO, Core Lithium and Mineral Resources also saw their stocks rise significantly.
The volatility of lithium prices has been ongoing since July, when China intensified its stance against overcapacity in the mining sector.
This has led investors to speculate that supply side reforms could limit the output of lithium and other commodities.
The lithium sector has faced challenges in terms of oversupply and slower-than-expected demand growth for electric vehicles.
After reaching record highs in 2022, lithium prices have since plummeted nearly 90%, causing global producers to reconsider their investment strategies.
Last September, lithium prices increased when CATL announced adjustments to production at the Yichun project.
However, prices declined after the company revealed plans to restart operations in February.
Additionally, China has postponed and quietly released its first rare earth mining and smelting quotas for 2025, indicating a move towards stricter regulation of this vital sector.
The delay in quotas this year is partly due to a proposal to include imported ore in the quota system, which has met with opposition from companies reliant on imported materials.
