CATL Prepares to Reopen Major Lithium Mine in China by December

Contemporary Amperex Technology Co. Ltd. (CATL) is gearing up to restart its significant lithium mine, the Jianxiawo, as early as December 2023. This move comes after the mine’s production was halted in August due to a lapsed permit. The company has developed a preliminary plan and is actively coordinating with suppliers to prepare necessary equipment, chemicals, and labor for the reopening.

While CATL’s preparations indicate a hopeful timeline, the mine’s reopening remains contingent upon obtaining regulatory approval. Sources familiar with the situation, who wished to remain anonymous, noted that the company’s schedule could change pending sign-off from the relevant authorities in Yichun City and Jiangxi Province. As of now, CATL has not publicly commented on the status of the reopening plans.

The Jianxiawo mine is particularly crucial as it is projected to contribute approximately 3% of global lithium production. Its closure has raised concerns within the lithium industry, especially amid increased scrutiny from government bodies. The uncertainty surrounding the mine has contributed to fluctuations in lithium prices, which have seen a resurgence in recent weeks.

In early November, CATL received information regarding the fees for mining rights, a vital step towards restarting operations at Jianxiawo. The lithium market has been facing challenges due to an oversupply, primarily driven by a slowdown in demand from electric vehicles (EVs). However, prices have recently increased, buoyed by optimism regarding future demand in the energy storage sector.

On the Guangzhou Futures Exchange, the most-active lithium carbonate contract surpassed 100,000 yuan (approximately $14,000) per ton earlier this week. This price surge reflects growing confidence in the market, particularly after the chairman of Ganfeng Lithium Group Co. forecasted that prices could potentially reach 200,000 yuan next year with a projected demand increase of more than 30%.

The fate of the Jianxiawo mine remains a focal point for stakeholders in the lithium sector, as the demand for lithium continues to rise in tandem with the global transition towards renewable energy and electric vehicles. As CATL navigates the reopening process, the implications for both the company and the broader lithium market are significant.