CATL suspends output at China lithium mine for three months
For an industry that has been plagued by a glut for more than two years, however, the pause in output from a significant link in the supply chain will be a boon
[SINGAPORE] Battery giant Contemporary Amperex Technology Co Limited (CATL) has suspended production at a major lithium mine in China’s Jiangxi province for at least three months, according to sources familiar with the matter.
CATL, the world’s largest manufacturer of electric-vehicle batteries, has announced internally that the Jianxiawo mine would be temporarily halting operations, they said. One of the sources said that the suspension came after the company failed to extend a key mining permit, which expired on Aug 9.
CATL did not immediately respond to questions from Bloomberg outside business hours.
The lithium industry has been buffeted in recent weeks by extreme volatility in the spot, futures and equity markets, and the Jianxiawo operation has been in particular focus, given questions over its permit renewal.
Last week, traders flew drones over the mine, forecast to account for about 3 per cent of the world’s mined production, in the hope of gauging the current state of output.
A second source briefed on the matter said that affiliated refineries in nearby Yichun had been informed of the closure. The first source added that the company was still in talks with government agencies to secure a renewal, but was preparing for the halt to last for months. The sources asked not to be named as they are not authorised to speak publicly.
CATL’s permit trouble and suspension come as Beijing cracks down on overcapacity across a host of industries and increases scrutiny of mining operations. For an industry that has been plagued by a glut for more than two years, however, the pause in output from a significant link in the supply chain will be a boon.
CATL saw revenue from its battery mineral resources business plummet 29 per cent in 2024, a drop that underscores challenges facing the Chinese company’s upstream investments, including a precipitous decline in lithium prices. These were originally intended as a way of securing supply and managing costs, and CATL had aggressively pursued mining stakes, even overseas.
The most-active lithium carbonate futures contract touched more than 80,000 yuan (S$14,320) in July on the Guangzhou Futures Exchange, which moved to rein in speculative trades afterwards. The material surged around 9 per cent last week to change hands at 75,000 yuan on Friday (Aug 8). BLOOMBERG
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