Lithium mine production temporarily halted by CATL for a period of three months due to the lapse of the permit, as per the report.

In a significant development for the lithium industry, CATL, a leading battery manufacturer, has temporarily halted production at its Jianxiawo lithium mine in Yichun, Jiangxi Province. The suspension comes after the expiration of the mining license on August 9, 2025 [1][2][3].

The Jianxiawo mine, known as China’s largest lepidolite lithium extraction project, holds a significant place in the global lithium market. With an annual capacity of about 100,000 tons LCE (Lithium Carbonate Equivalent), it accounts for roughly one-third of Jiangxi’s lepidolite capacity and about 10% of China’s total domestic lithium mining capacity. Globally, it produces around 3–6% of expected lithium output for 2025 [1][3].

The suspension has sent ripples through the lithium market, causing a notable rise in lithium prices. Lithium carbonate prices in China have increased by approximately 3% since the shutdown, with spot prices reaching highs not seen since early 2025. This price jump reflects market concerns about the reduction in supply and the potential for similar regulatory actions across the lithium sector [3][4].

The suspension could lead to a short-term tightening of lithium supply in China and globally, potentially sustaining higher lithium prices. It may also result in increased regulatory scrutiny and tighter control over mining operations, potentially delaying or reducing lithium output from other mines. Additionally, pressure on battery manufacturers and the electric vehicle supply chain to secure lithium resources under more regulated and potentially constrained mining conditions is expected [4][5].

Despite diversified supply chains, the suspension highlights risks to supply stability in the lithium market and may accelerate price normalization or upward adjustments in the medium term [4][5]. It's important to note that the report did not specify if CATL has made any plans to resume production after the suspension period [6].

Meanwhile, BYD, another major player in the electric vehicle industry, has withdrawn plans to build a lithium plant in Chile due to the plunge in lithium prices [7]. This move could be a positive development for lithium producers, indicating a potential shift in market dynamics.

The Chinese government's crackdown on overcapacity across multiple industries and intensified scrutiny of mining operations is a key factor in the current situation [8]. Yichun, often referred to as the "Lithium Capital of Asia," is not exempt from these regulations.

In the world of lithium-ion batteries, lithium carbonate and iron phosphate are the primary raw materials for lithium iron phosphate (LFP) [9]. As the demand for electric vehicles continues to grow, the importance of stable and sustainable lithium supply cannot be overstated.

[1] https://www.catl.com/en/investor/news/press-releases/2025/08/catl-suspends-production-at-its-jianxiawo-lithium-mine-in-yichun-jiangxi-province [2] https://www.reuters.com/business/autos-transportation/catl-suspends-production-lithium-mine-jiangxi-china-2025-08-10/ [3] https://www.bloombergquint.com/onweb/news/catl-lithium-mine-shutdown-could-tighten-supply-as-beijings-crackdown-bites [4] https://www.scmp.com/economy/china-economy/article/3169941/china-cracks-down-overcapacity-lithium-industry-amid [5] https://www.reuters.com/business/autos-transportation/catl-lithium-mine-shutdown-could-tighten-supply-as-beijings-crackdown-bites [6] https://www.reuters.com/business/autos-transportation/catl-suspends-production-lithium-mine-jiangxi-china-2025-08-10/ [7] https://www.miningweekly.com/article/byd-withdraws-plans-to-build-lithium-plant-in-chile-due-to-plunge-in-lithium-prices-2025-08-12 [8] https://www.reuters.com/business/autos-transportation/catl-suspends-production-lithium-mine-jiangxi-china-2025-08-10/ [9] https://www.sciencedirect.com/topics/chemical-engineering/lithium-iron-phosphate-battery