Lithium Stocks Skyrocket After CATL Halts Major Mine Operations

2025-08-11 companies

Jiangxi, Monday, 11 August 2025.
The suspension of CATL’s Jiangxi mine for at least three months due to permit issues caused a significant rise in lithium prices and stocks, impacting global supply chains.

Background on CATL’s Mine Suspension

Contemporary Amperex Technology Co. Ltd. (CATL) [300750:CH], the world’s largest electric vehicle battery manufacturer, has suspended operations at its Jianxiawo lithium mine in Jiangxi province, China. This temporary halt, set to last at least three months, was initiated on August 9, 2025, due to an expired mining license [1][4][7].

Immediate Market Impact

The announcement led to a surge in lithium prices, with lithium carbonate futures on the Guangzhou Futures Exchange rising by 8% [3][6]. This spike reflects the market’s response to imminent supply disruptions, exacerbating existing anxieties over future availability of the crucial battery material [3][6].

Stock Market Reaction

The halting of operations caused significant stock performances. Ganfeng Lithium Group Co. [1772:HK] surged by 21%, and Tianqi Lithium Corporation [002466:CH] saw increases of 19% [2][5]. Meanwhile, Australian lithium producers such as Liontown Resources and Pilbara Minerals experienced gains of up to 25% and 17.4%, respectively [4][7]. These increases underscore global dependence on lithium supply chains influenced by Chinese production dynamics [7].

Regulatory and Economic Factors

The mine closure stems from CATL’s inability to renew its crucial mining permit before its expiry and is seen in light of Beijing’s broader strategy to address overcapacity in various sectors while emphasizing ‘high-quality development’ [4][8]. As companies like CATL navigate tighter regulatory environments, there is notable concern over China’s significant role in the global lithium market, which compels international stakeholders to diversify their resource procurement strategies [8].

Sources

lithium market CATL