CATL readies China lithium mine restart earlier than thought
Prices of lithium carbonate has seen heightened volatility over supply uncertainties
[SINGAPORE] A Chinese lithium mine that pushed up battery-metal prices when it halted production last month is now gearing up to restart sooner than previously anticipated. Shares in major producers plunged.
Executives at Contemporary Amperex Technology Co Limited (CATL) told employees in a meeting early Tuesday (Sep 9) to prepare for a resumption at the Jianxiawo site and recall front-line workers, said a source with direct knowledge of the matter, who asked not to be identified discussing private information. Battery giant CATL did not immediately respond to a request for comment.
The Jianxiawo mine in Yichun, a key Chinese lithium hub, has become a focal point for market sentiment. Its production halt due to an expired license stoked speculation that it was part of Beijing’s tougher stance on overcapacity and reflected a shift towards supply discipline. Days before Jianxiawo’s permit expired on Aug 9, traders flew drones over the site in the hope of gauging the state of operation.
Prices of lithium carbonate, a refined form of the material used in batteries, has seen heightened volatility over supply uncertainties. On Tuesday, news of CATL’s plans to resume output sent shares of major lithium producers tumbling. SQM and Albemarle fell 8.8 per cent and 11 per cent, respectively, in New York.
“An earlier-than-expected restart of Jianxiawo can disrupt the theme of market rebalancing in the short term.” Jefferies analysts, including Shuhang Jiang, wrote in a note to clients. “We would not be surprised if China lithium stocks react negatively.”
Bloomberg News reported in August that output at the Jianxiawo mine would be suspended for at least three months after CATL failed to extend the mining permit. The company now sees mining activity at the site resuming earlier, although local authorities have yet to issue a new permit, the source said.
Chinese media outlet Jiemian reported earlier on Tuesday that the mine would resume activity “soon”, without giving a timeline. BLOOMBERG
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