CATL's mine suspension adds fuel to lithium prices! A ten-thousand-ton salt lake lithium extraction company is also in the process of renewing its mining license

A significant piece of news over the weekend is that CATL has confirmed the suspension of mining operations at its Jiangxi Jianxiawo mining site. As a result, on August 11, the lithium sector, represented by Tianqi Lithium and Ganfeng Lithium, saw a substantial increase, with institutional buying reflected in the post-market leaderboard data. The impact of this sudden event is notable as this mining area is a major source of lithium mica supply, contributing a considerable amount.

A week ago, lithium carbonate futures and spot prices had already shown unusual movements, achieving consecutive large increases. On August 11, industry insiders told the Daily Economic News that, based on news from domestic salt lake and lithium mica mining companies, supply expansion is not as straightforward as imagined. In addition to lithium mica, there are also large domestic salt lake lithium extraction companies currently processing mining license renewals, making this the second large salt lake lithium extraction company needing to address lithium mining license renewals after Zangge Mining.

Market Had Already Risen Before the Sudden News

Last weekend, the new energy giant CATL made a big announcement, confirming the suspension of mining operations at its Jiangxi Jianxiawo mining site.

On August 11, CATL stated on its interactive platform that after the mining license for its Yichun project expired on August 9, it had suspended mining operations and is in the process of applying for a mining license renewal according to relevant regulations. It plans to resume production as soon as approval is obtained, and this matter will not significantly impact the company's overall operations.

This news triggered a surge in the lithium sector, with lithium mining leaders Tianqi Lithium and Ganfeng Lithium hitting their daily price limits, and companies like Rongjie Co. and Yahua Group also following suit. The main contract for lithium carbonate futures even hit the upper limit, with prices exceeding 80,000 yuan/ton.

"The entire Jiangxi mica mine has a lithium carbonate equivalent supply of over 150,000 tons, and CATL's mine may account for about half of that. Lithium mica accounts for about 10% of the global lithium carbonate equivalent supply..." said the secretary of the board of a domestic second-tier lithium company, who has been closely monitoring the suspension of CATL's lithium mica mine, calling it big news for the industry. Regarding future expectations, the key is whether this lithium mine will be permanently suspended or if it will resume production after the license renewal.

He believes the symbolic significance of CATL's mine suspension lies in the fact that the release of lithium supply is not as simple as the industry imagines, "Obtaining licenses is more difficult than before, and the increased difficulty in supply release leads to higher marginal costs for the industry." Additionally, he mentioned that currently, Australia is shutting down some lithium mining capacities, amounting to about 100,000 tons of lithium carbonate equivalent, which are some of the low-priced lithium carbonate clearing capacities.

An anonymous lithium industry analyst told reporters that CATL's Jianxiawo project has an annual capacity of approximately 100,000 tons of LCE (lithium carbonate equivalent), with its corresponding three smelting plants maintaining a monthly output in the range of 7,000 to 8,500 tons in the second quarter. In July, due to equipment debugging and adjustments in the ore supply chain, production slightly declined but remained at a high level, accounting for about 10% of the national total smelting output.

In fact, before the suspension of CATL's lithium mica mine, the aforementioned secretary had already noticed that market prices were "quietly rising." "We settle with major customers based on the monthly average price. For example, the lithium carbonate supplied this month will have its average price confirmed and settled at the beginning of next month. On July 31, we noticed that the average price had reached 67,000 yuan/ton, and by last Friday, August 8, the price had risen to around 72,000 yuan/ton." An unnamed lithium industry analyst told reporters that as of August 11, 2025, the cost of lithium extraction from lithium mica purchased by Fubao Information is approximately 76,000 yuan/ton (theoretical cost), and there is some hedging space in the futures market; however, based on the current spot market price of battery-grade lithium carbonate, the production profit is still in a slight loss state, with a loss of about 1,200 yuan per ton.

Exclusive: A lithium extraction company with a capacity of tens of thousands of tons is processing its mining license renewal

Reporters from the Daily Economic News noted that this statement is consistent with the stage increase in the price of lithium carbonate futures main contracts. For example, during the period from August 6 to August 8, the price increase of lithium carbonate futures main contracts was nearly 20%, and at that time, the futures price reached 76,000 yuan/ton.

However, the aforementioned secretary of the board also mentioned that the market needs to remain calm, and it is still impossible to determine whether lithium prices will continue to rise in the future, as after the price increase, overseas high-cost mines may resume production. However, the resumption of overseas high-cost mines does not synchronize with the fluctuations of lithium prices over one or two days. "For example, if the cost is 100,000 yuan/ton and it previously dropped to 70,000 yuan/ton and stopped production, even if it rises back to 100,000 yuan/ton, it may not immediately resume production. It needs to see a sustained and stable profit margin before it will recover, and there is preparation time for that."

The trend increase brought by sudden news is enough to make people "intoxicated." A chief analyst in lithium batteries told reporters: "It is expected that the impact will last for 3 months, but how long the actual impact will be is unknown... just quietly going long." Another general manager of a large lithium company stated that although part of the company's mine comes from lithium mica, the production base for lithium carbonate is still operating normally.

Currently, the main sources of global lithium resource supply include spodumene, lithium brine, lithium mica, and lepidolite. According to statistics, the total global lithium resource supply in 2023 (including both lithium ore supply and lithium brine supply) is 1,047,800 tons LCE, an increase of 34.8% compared to the total supply in 2022, with spodumene, lithium brine, and lithium mica accounting for 52%, 41%, and 7% of the total, respectively. Among them, Greenbushes and SQM's Atacama salt lake are the world's largest operating lithium mines and lithium brine projects. China's lithium brine resources account for over 85% of the total lithium, mainly concentrated in the Qinghai and Tibet regions.

In July 2025, according to Fubao Information data, the domestic lithium mica extraction output is approximately 19,000 tons, accounting for 27% of the total lithium carbonate smelting output in the country for that month.

Reporters from the Daily Economic News interviewed several lithium industry personnel and learned that the mining license renewal issue behind the shutdown of CATL's mining area is not an isolated case, as there have been cases in Qinghai, the main production area for lithium extraction from salt lakes in China. A well-known example is Zangge Mining, whose lithium company, Golmud Zangge Lithium Industry Co., Ltd., was ordered by the government to stop mining lithium resources. The company stated that it is promoting the smooth change and renewal of the mining license for the Qarhan Salt Lake. Going further back to 2023, another giant in the Qarhan Salt Lake, Salt Lake Co., also changed its mining license to include lithium chloride as a mineral type.

On August 11, reporters from the Daily Economic News also learned exclusively that in addition to the Qarhan Salt Lake, another lithium extraction company with a capacity of tens of thousands of tons in Qinghai Province is processing its mining license renewal. The reporter checked its mining license and found that the expiration date is in February of this year Compared to Salt Lake Potash and Zangge Mining facing new "lithium" mineral issues, this lithium company’s mining license itself includes lithium, potassium, and other minerals. "We have already submitted the materials to the relevant departments, and there is no problem with the renewal of the mining license," a company executive told reporters.

The aforementioned analyst stated that in the short term, the raw material inventory of the Ningde-related smelting plant is expected to maintain production, and the suspension of the Jianxiawo project has limited immediate impact on actual supply, with more influence reflected in sentiment. In the medium term, considering that some spodumene lithium extraction lines have resumed production and increased output recently, it is expected that the total domestic lithium carbonate production in August will remain stable or see slight growth. However, there is a certain upper limit to the output increase of spodumene production lines. Entering September and October, combined with the transmission of the impact from the suspension of Jianxiawo, it is expected that the monthly output of domestic lithium carbonate will show a tightening trend, and the monthly supply-demand balance may become tense. "The subsequent price trend needs to observe the matching degree of actual demand and supply, as well as the sustainability of mining license compliance risks. The deadline for the reserves verification on September 30 may be a key time node."

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