CATL suspends operations at major lithium mine, seeks new licence
Chinese battery giant Contemporary Amperex Technology said on Monday it had suspended production at a major lithium mine after its licence expired, sparking a surge in lithium futures and miners' share prices.
CATL said the license for its mine in Yichun, in the southern province of Jiangxi, had expired on August 9 and the company was applying to renew it "as soon as possible".
"Once approved, we will resume production," CATL said.
The most active lithium carbonate futures on the Guangzhou Futures Exchange surged by 8% to hit the price limit up after the announcement.
In China, Ganfeng Lithium's shares rose more than 4%, while its Hong Kong-listed stock surged around 10% at the open. Tianqi Lithium jumped around 11%.
Among Australian lithium miners, Liontown Resources was the top gainer, soaring nearly 25%. Pilbara Minerals, IGO Core Lithium and Mineral Resources jumped between 10.5% and 17.4%.
"Essentially, this news alleviates some of the oversupply pressures which have been a constraint on underlying lithium prices," said Tim Waterer, market analyst at KCM Trade.
The lithium sector has been grappling with weaker-than-anticipated growth in demand for electric vehicles and an oversupplied market.
After soaring to record highs in 2022, prices of lithium, which is critical to the world's transition to greener energy, have tumbled almost 90%, prompting producers around the world to scale back investment plans.
Lithium prices gained last September when CATL announced plans to adjust lithium carbonate production at its project in Jiangxi, but prices slid when CATL said in February it would restart the operation.
The mine suspension was first reported by Bloomberg News on Sunday.
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