Over the past few weeks, uncertainty surrounding the future of eight lithium mining companies in Yichun, Jiangxi Province, has roiled the lithium carbonate market. On the morning of August 11th, power battery giant CATL (300750.SZ/03750.HK) confirmed on its interactive platform that it had suspended mining operations at its Yichun project following the expiration of its mining license on August 9th.
When will the aforementioned projects restart? There's currently no clear timeline. CATL is currently stating that it is expediting its mining license renewal application in accordance with relevant regulations and will resume production as soon as possible upon approval. The company also stated that this matter will have little impact on its overall operations.
In fact, at the 2025 first half performance briefing on July 30, CATL executives responded to investors' questions by saying that the company's Yichun lithium mine project is currently operating normally, and the company has submitted the renewal application materials to the Yichun Municipal Natural Resources Bureau in advance as required. The city and provincial levels have confirmed that the renewal registration requirements are complete and the content is complete. The renewal application is currently awaiting approval.
CATL also mentioned at the time that recent lithium carbonate prices have fluctuated somewhat, but that prices are ultimately determined by supply and demand. It also stated that the company has strategic lithium reserves and long-term agreements with suppliers, which allow it to better manage price fluctuations.
In mid-July, the Yichun Municipal Natural Resources Bureau issued a notice requiring eight local lithium mining companies to prepare reserve verification reports and complete them by September 30. This was reportedly intended to investigate whether these companies were circumventing approval authority or exceeding their authority in handling formalities.
Notably, shares of listed lithium mining companies surged on the morning of August 11th, influenced by the recent suspension of CATL's Yichun project. By the close of morning trading, Tianqi Lithium (002466.SZ) and Shengxin Lithium Energy (002240.SZ) had hit their daily limit, while China Mining Resources (002738.SZ), Yongshan Lithium (603399.SH), and Ganfeng Lithium (002460.SZ) all saw gains exceeding 9%. Furthermore, several other companies, including Tibet Mining (000762.SZ), Salt Lake Co., Ltd. (000792.SZ), and Yahua Group (002597.SZ), also saw impressive gains.
All lithium carbonate futures contracts hit the daily limit, among which the main contract (2511) is currently quoted at 81,000 yuan/ton.
On April 20, 2022, Yichun Times New Energy Mining Co., Ltd. ("Yichun Times"), a majority-owned subsidiary of Contemporary Amperex Technology (CATL), successfully won the exploration rights for porcelain clay (containing lithium) in the Zhenkouli, Yifeng County, and Jianxiawo, Fengxin County, Jiangxi Province (hereinafter referred to as the "Jianxiawo Mining Area"), with a bid of 865 million yuan. The exploration rights cover an area of 6.44 square kilometers and have inferred chinastone ore resources of 960.251 million tons and associated lithium metal oxides of 2.65678 million tons.
According to the "Report on the Income Assessment of the Transfer of Ceramic Clay Mine Exploration and Exploration Rights in the Zhenkouli, Yifeng County, Jiangxi Province and the Lianxiawo Mining Area, Fengxin County" previously disclosed by the Yichun Municipal Natural Resources Bureau, the investment in the mine assessment and design project is 2.158 billion yuan, the recoverable reserves in the Lianxiawo mining area are 774.92 million tons, the production scale is calculated at 30 million tons/year, and the mine service life is 25.83 years.
Previously, some analysts calculated that based on the average lithium oxide grade, the above production scale could reach 200,000 tons of lithium carbonate per year.
At that time, CATL said that Yichun Times New Energy Mining's acquisition of lithium mine exploration rights in Yichun City was an important measure for its full industrial chain layout, and mentioned that it would help push the prices of lithium-related raw materials back to rationality.
However, subsequent industry developments indicate that prices returned to rationality much faster than expected. In 2022, lithium carbonate prices climbed all the way to a peak of approximately 600,000 yuan/ton. However, shortly after CATL secured the Jianxiawo mining project, the industry began a sharp decline, embarking on a long downward trajectory that has yet to bottom out. As of August 8th, according to SMM Lithium Battery statistics, battery-grade lithium carbonate ranged from 70,500 yuan/ton to 73,300 yuan/ton, with an average price of 71,900 yuan/ton.
Over the past month, driven by the country's "anti-involution" policy and disturbances from supply-side news, lithium prices have experienced a small-scale "roller coaster".
The main lithium carbonate contract rose from a low of 58,400 yuan/ton on June 23rd to an intraday high of 80,520 yuan/ton on July 25th, a peak increase of 37.88%. It then entered a downward trend at the end of July, but still achieved its largest monthly gain since February 2024. Recently, driven by news that the suspension of CATL's Lianxiawo mining project may be approaching, the price has continued to rise.
As of press time, CATL's A-share price was 263.87 yuan per share, up 0.15%. Since July 30th, CATL's stock price has been in a continuous decline.
