Lithium Mine Closure Can’t Arrest Metal’s Price Retreat

An unexpected shutdown at one of China’s largest lithium mines has left the industry scrambling to determine whether the move will be enough to halt the prolonged price slump of the battery material, Winnie Zhu and Paul-Alain Hunt reported for Bloomberg News.

CATL’s shutdown in the southeastern Jiangxi province is particularly significant because the mine is not only substantial in size but is also owned by a battery producer, making it a less likely candidate for closure. I Photo: CATL

The share prices of lithium miners from Australia to South America surged after reports that Contemporary Amperex Technology Co. Ltd. (CATL), the world’s largest battery producer, was suspending operations at a mine that accounts for 5% to 6% of global lithium supply.

Citigroup Inc. raised its price forecasts, while Chinese futures for the metal jumped.

Lithium spot prices have plunged nearly 90% since late 2022, leading to mine closures and project delays across the globe. However, CATL’s shutdown in the southeastern Jiangxi province is particularly significant.

The mine is not only substantial in size but is also owned by a battery producer, making it a less likely candidate for closure. Additionally, it produces lithium from lepidolite—a low-grade ore that has recently become a major source of the metal, contributing to the oversupply.