Wedoany.com Report-Aug. 13, Contemporary Amperex Technology Co. Ltd. (CATL), a leading battery manufacturer based in China, has paused operations at its lithium mine in Yichun, Jiangxi province, due to an expired license, as reported by Reuters. The company is actively working to renew the license to resume production as soon as possible.

The volatility of lithium prices has been ongoing since July, when China intensified its stance against overcapacity in the mining sector.

The Yichun mine, capable of producing over 46,000 tonnes of lithium carbonate equivalent annually, accounts for approximately 3% of the projected global lithium output for 2025. This suspension is the first publicly reported halt in the region, drawing significant attention to the lithium market.

Following the announcement, lithium carbonate futures on the Guangzhou Futures Exchange rose by 8%, reaching the daily price limit. Shares of lithium mining companies in China and Australia also saw notable increases. In China, Ganfeng Lithium’s stock rose by over 4%, while Tianqi Lithium’s shares surged by around 11%. In Australia, Liontown Resources experienced a 25% stock increase, with other companies like Pilbara Minerals, IGO, Core Lithium, and Mineral Resources also reporting significant gains, some exceeding 10%.

Lithium prices have been volatile since July 2025, influenced by efforts to address overcapacity in the mining sector. Analysts at Guotai Junan Futures Co. noted: “The rise in exports is driven by China’s need for soybean meal, while other countries need soybean oil.” Although this quote pertains to a different context, it reflects broader market dynamics affecting commodity prices, including lithium, due to supply and demand shifts.

The lithium industry has faced challenges from oversupply and slower-than-anticipated demand growth for electric vehicles. Since peaking in 2022, lithium prices have dropped nearly 90%, prompting global producers to reassess their strategies. Last September, CATL’s production adjustments at the Yichun mine led to a temporary price increase, but prices fell again after the company announced plans to restart operations in February 2025.

China has also delayed and discreetly released its first rare earth mining and smelting quotas for 2025, reflecting a cautious approach to regulating key resources. The delay partly stems from discussions about including imported ore in the quota system, which some companies have opposed due to their reliance on imported materials.

The temporary suspension of the Yichun mine highlights the dynamic nature of the global lithium market. CATL’s efforts to renew its license swiftly aim to minimize disruptions, ensuring continued contributions to the battery manufacturing sector and supporting the global demand for sustainable energy solutions.