Contemporary Amperex Technology has suspended operations at one of its most important lithium mines in Jiangxi, China. The company announced that the mining license for the Yichun project expired on August 9, but an extension is currently being applied for. Production is expected to resume immediately after approval. However, according to a Bloomberg News report, this will not be possible for at least three months.
The Yichun mine has an annual capacity of approximately 46,000 tons of lithium carbonate equivalent. This corresponds to about three percent of the projected global production for 2025, according to Australian government data. Following the announcement, lithium carbonate futures on the Guangzhou Futures Exchange rose eight percent. Shares in several lithium producers in China and Australia increased by double digits.
The move comes amid increased regulatory measures in China targeting overcapacity in the raw materials sector. Local authorities had previously ordered Zangge Mining, a producer, to shut down a mine in Qinghai. For months, the global lithium industry has struggled with oversupply and weaker electric vehicle growth. After reaching a record high in 2022, prices have plummeted by nearly 90 percent.
