The world’s largest manufacturer of batteries for electric vehicles, CATL, is just Stop one of its main lithium mines in China. A decision which, in a few hours, was enough to make the prices of this strategic metal jump.
A key site for global supply
Located in Yichun, in the Chinese province of Jiangxi, The Jianxiawo mine alone represents between 3 and 6 % of world production of lithium, an essential component for the manufacture of batteries. CATL, which provides most large car manufacturers, has announced that production would be suspended for at least three months.
Officially, the reason is administrative: the operating permit, which has arrived at expiration on August 9, must be renewed. The company claims to work on this regularization. But other factors are to be taken into account. Indeed, Beijing has been carrying out a reinforced control campaign for several months in the mining sector. Objective : Fighting overcapacity for production and imposing more strict environmental standards.
The authorities would notably ask operators updated reports on the reserves, in order to better supervise the extraction. To this is added an economic dimension, because the mine was no longer profitable at the current rate. A temporary stop therefore also allows reduce the supply and, potentially, to support prices.
Immediate repercussions on the markets
The announcement acted as an electric shock. In a few hours, the term contracts on lithium carbonate on the Guangzhou Stock Exchange increased by 8 %, reaching the daily limit of authorized increase. The actions of the main world producers, from China to Australia, have jumped, some up to +20 %.
This reaction is not surprising: lithium, although widely available today, remains a nervous market and highly dependent on Chinese production. After a spectacular fall of 88 % since the heights of 2022, the prices were at the lowest, weakening the profitability of numerous farms.
For investors as well as for car manufacturers, this case recalls thatOnly one decision made by the Chinese government may suddenly change the situation, with chain effects on a whole sector. A reality that highlights global Chinese lithium dependence and the vulnerability of supply chains.
In such a strategic market, each brake on production can quickly turn into a planetary shock wave.
- CATL suspended the operation of its Jianxiawo lithium mine in China for at least three months, representing up to 6 % of world production.
- Officially motivated by an expired permit, the judgment is also part of a context of regulatory hardening and economic pressure.
- This decision immediately made the prices of lithium and the actions of producers jump, illustrating global dependence on the Chinese market.
📍 To not miss any Citron press, follow us on Google News and Whatsapp.
