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Lithium prices and mining stocks soared after battery giant Contemporary Amperex Technology Co. Ltd. (CATL) halted production at its Jianxiawo mine in Jiangxi, China.
By Ryan Chigoche
The shutdown, prompted by the expiry of the mining licence on August 9, is expected to last at least three months and has fueled speculation that Beijing may target additional projects as it tackles industrial overcapacity.
Located in Yichun, China’s main lithium hub, the mine produces around 6% of global supply, with nearby operations adding another 5%.
Bank of America estimates the closure could significantly influence near-term pricing. On Monday, lithium carbonate futures in Guangzhou hit the 8% daily trading limit, with the November contract climbing to 81,000 yuan per ton (US$11,260 per ton), up from 75,000 yuan (US$10,425) on Friday. Spot prices rose 3% to 75,500 yuan (US$10,500), the highest since February, while November delivery prices on the Liyang Zhonglianjin platform surged to about 85,500 yuan (US$11,890).
The rally extended to mining shares worldwide. In Hong Kong, Tianqi Lithium jumped up to 19% and Ganfeng Lithium rose 21%, while CATL’s own stock gained 2.8%. In Australia, PLS surged 20%, Liontown Resources climbed 25%, and Mineral Resources advanced 14%.
CATL stated the halt would have minimal impact on its battery manufacturing, but analysts warn that wider shutdowns in Yichun could tighten the global supply chain. Local authorities have already instructed eight regional miners to submit reserves data by September 30 following compliance audits.
China’s “anti-involution” campaign aimed at reducing overcapacity and ensuring compliant resource extraction is seen by market watchers as a driving factor behind the move. Citigroup analysts believe the closures could help the country reprice strategic resources and strengthen regulatory oversight.
CATL, like many Chinese battery producers, has invested heavily in securing upstream mineral supplies, a strategy that has supported China’s rise as the leading electric vehicle manufacturer. However, global lithium markets remain under pressure from oversupply and slowing EV demand, including the impact of reduced incentives in the United States.
Traders now await signs of broader restrictions in Yichun after September, which could push lithium prices even higher.
