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Chinese battery producer CATL suspended lithium mining at its Jianxiawo lepidolite mine at Yichun city in Jiangxi province, southeast China, on August 9, after its mining permit expired, the company announced on its investor interaction platform on Monday August 11.
A source at CATL confirmed to Fastmarkets that mining had been halted, but could not say how long operations are likely to be halted.
On its investor interaction platform CATL said it was already in the process of applying for an extension of the permit and hoped to resume mining as early as possible, adding that the suspension would have little impact on the company’s overall operations.
“The annual capacity of Jianxiawo is around 65,000 tonnes of lithium carbonate equivalent (LCE) per year, Fastmarkets research estimates show, and the production cut will amount to 7% of its total monthly LCE production within China – around 5,000 tonnes of LCE per month,” according to Fastmarkets senior analyst for battery raw materials Chandler Wu.
The September contract on the Guangzhou Futures Exchange (GFEX) opened on Monday at the daily up limit of 8% at 80,560 yuan ($11,218) and held steady through the day, following the news of the Jianxiawo suspension. This was up by 8,220 yuan, or 11.36% from Friday August 8’s opening of 72,340 yuan per tonne.
Any disruption to supplies of lepidolite from mines in Jiangxi province, tend to cause serious volatility in China’s lithium market.
For example, in September 2024, a lepidolite and lithium producer in the province suspended lepidolite production, resulting in a spike on the GFEX and in spot lithium carbonate prices.
Expectations that the Jianxiawo mine would be suspended had been growing over the past few weeks, sources said, and by Friday August 8 had led to increasingly bullish sentiment and rapid increases on the GFEX.
The September contract on GFEX posted sharp gains from August 6 and it almost hit its daily up limit on August 8. The contract closed at 76,640 yuan on Friday, up from 72,340 yuan at the opening of trading on that day and up from 67,680 yuan at the start of the day on August 6.
The upward momentum in the futures market led to a spike in spodumene and lithium carbonate prices, with sellers pushing up offers in line with the pace of change on GFEX.
Fastmarkets’ daily assessment of spodumene min 6% Li2O, spot price, cif China was $800-850 per tonne on Friday August 8, up from $750-800 per tonne a day earlier, and up from $700-760 per tonne a week earlier.
Fastmarkets’ daily price assessment for lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range, exw domestic China, was 72,300-76,000 yuan per tonne on Friday, up from 69,000-71,000 yuan per tonne a day earlier, and from 67,000-68,920 yuan per tonne on August 1.