Lithium prices and producer shares climbed on Monday after Contemporary Amperex Technology Co. Ltd. (CATL) suspended operations at a major mine in Jiangxi province, stoking expectations of tighter supply and further curbs across China’s battery-metals sector.
CATL said production at its Yichun project was halted after its mining licence expired on 9 August. The company added it is seeking renewal “as soon as possible”. Lithium carbonate futures on the Guangzhou Futures Exchange rose 8% to the daily limit following the announcement.
The halted asset is widely identified by market participants as the Jianxiawo mine in Yichun, a core hub for China’s hard-rock lithium. Bloomberg reported the stoppage could last at least three months, citing people familiar with the matter. A prior report said affiliated refineries in the area had been informed of the pause.
Equities in the lithium complex rallied. In Hong Kong trading, Tianqi Lithium rose as much as 19% and Ganfeng Lithium gained 21%. Australian producers also advanced, with some names up by double digits. CATL’s own shares were up as much as 2.8% in Hong Kong after it said the stoppage would have limited impact on overall operations.
Analysts characterised the move as consistent with Beijing’s stated efforts to manage industrial overcapacity. Investors have been alert to the prospect of further measures after officials in recent weeks tightened rhetoric and ordered a separate halt at Zangge Mining in Qinghai. “I think it will mean the lithium price in the near term has very big upside,” said Matty Zhao, co-head of China equity research at Bank of America, in an interview with Bloomberg TV.
The scale of the Yichun operation is significant by global standards, though estimates vary. Bank of America puts Jianxiawo’s contribution at about 6% of world output, with other Yichun-area projects providing at least a further 5%. By contrast, Australian government data cited by Reuters indicate the mine’s capacity is just over 46,000 tonnes of lithium carbonate equivalent per year, about 3% of forecast 2025 supply. The different yardsticks highlight uncertainty around actual throughput versus nameplate capability and prospective expansions.
Price action reflects a market that has been volatile since a sharp correction from 2022 peaks. Lithium prices have fallen by almost 90% from record highs as supply expanded faster than demand, prompting cutbacks and project deferrals across the industry. Monday’s surge suggests traders expect China’s policy stance and targeted suspensions to curb output and stabilise prices into the second half.
The fate of mining licences in Yichun has been a focal point for weeks amid speculation that authorities might not extend some permits. CATL confirmed the suspension after the expiry date, without providing details on the renewal timetable. The company said production would resume once the licence is approved. Market participants will watch for any knock-on actions at other sites in the hub, where cumulative output is material to seaborne supply.
Shares of lithium producers in China and Australia reacted quickly to the prospect of tighter near-term supply. In Australia, names including Liontown Resources, Pilbara Minerals, IGO, Core Lithium and Mineral Resources registered gains ranging from roughly 10% to more than 20% intraday. Moves in Hong Kong and Shenzhen echoed that strength as traders priced in higher realised prices for raw materials and improved margins at integrated producers.
While the immediate effect is a firmer price backdrop, the broader supply-demand picture remains sensitive to electric-vehicle sales trends and financing conditions for new mines. Several analysts noted that low prices over the past year have discouraged investment in new capacity, raising the risk of undersupply later in the decade if project pipelines do not recover. For now, futures and equities indicate a view that Chinese policy may constrain output enough to balance the market into year-end.
CATL is the world’s largest battery maker by shipments and has pursued upstream integration to secure raw materials. The company indicated the Yichun pause would not materially affect its battery manufacturing operations, a point that helped limit the reaction in its own shares compared with miners. Any prolonged disruption beyond the reported three-month window, however, would likely harden expectations of a tighter concentrate and chemicals market through early 2026.
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