China’s battery behemoth CATL has hit pause on production at one of its biggest lithium mines—sparking a rally in lithium prices and giving miners’ stocks a serious boost.
The shutdown comes after the company’s license for its Yichun project in Jiangxi province expired on August 9. CATL says it’s pushing to get the paperwork renewed “as soon as possible” and will flip the switch back on once the green light comes through.
Investors didn’t mind the hiccup. Lithium carbonate futures on the Guangzhou exchange spiked 8% to their daily limit, while lithium miners in China and Australia rode the wave. Ganfeng Lithium’s Hong Kong shares jumped about 10%, Tianqi Lithium leapt 11%, and Aussie players like Liontown Resources surged nearly 25%.
Why the hype? The mine’s 46,000-ton annual capacity represents roughly 3% of the world’s projected lithium output for 2025. Taking it offline—especially in the middle of Beijing’s crackdown on industrial overcapacity—helps ease oversupply worries that have been hammering prices for months.
The lithium market’s been on a rollercoaster. After hitting record highs in 2022 on electric vehicle boom fever, prices have plunged nearly 90% as EV demand cooled and supply ballooned. Producers from Australia to South America have shelved projects or slowed investment.
CATL’s Yichun mine has played a role in those swings before—prices climbed when CATL hinted at scaling back production last year, then slumped after it restarted in February. This latest pause, first reported by Bloomberg, shows just how sensitive the market still is to any disruption from the sector’s biggest players.
The original story by Rishav Chatterjee, Amy Lv, and Lewis Jackson for Reuters.
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