Key Takeaways:
CATL's (03750.HK) Jianxiawo lithium mine in Yichun, Jiangxi, resumed production June 29 after securing all required permits, including the critical safety production license obtained the same day, a person close to the company told National Business Daily.
"The most critical safety production permit was obtained today," the person said. The mine had regained its land use pre-approval on June 17, and local residents working at the site have completed training to prepare for the restart.
The Jianxiawo mine, one of the world's largest lepidolite operations, has an estimated annual capacity of 95,000 to 100,000 tonnes of lithium carbonate equivalent, according to Shaw and Partners research cited in a June 23 note. That volume represents roughly 6% of global lithium supply. The mine suspended operations Aug. 10, 2025, after its mining permit expired Aug. 9.
The restart injects fresh supply into a market already reeling from a 30% price decline. Lithium carbonate futures on the GFEX have tumbled from about CNY200,000 per tonne in May to roughly CNY140,000, as traders priced in the risk of CATL's return alongside growing competition from sodium-ion batteries. The sell-off has pared gains from the June 2025 low of CNY59,900, when a wave of Chinese mine closures pushed prices higher.
Supply Fears vs. Market Reality
The scale of CATL's restart remains uncertain. Macquarie assumes just 5,000 tonnes of carbonate from the mine this year, with a full ramp not before late in the third quarter. UBS pencils in around 40,000 tonnes and a second-half restart. Wood Mackenzie expects Jianxiawo to stay offline until 2027 altogether, according to research published in mid-June.
The divergence matters because China's lithium supply has been tightly controlled since the government's "anti-involution" campaign formalized last year. Authorities banned below-cost selling, reclassified lithium as a strategic mineral, and canceled 27 mining permits in Jiangxi alone, Shaw and Partners estimates. Those measures removed roughly 17% of global lithium supply from the market, creating a structural floor for prices.
Part of what unnerved traders in recent weeks was a jump in visible lithium carbonate stocks in Chinese warehouses. Macquarie attributes the increase to previously unreported trader-held volumes now counted in the official tally. Strip out that accounting shift, the bank said, and total inventories have continued to draw down — the opposite of what a market drowning in metal would show.
What the Restart Means for Lithium Markets
CATL is the world's largest power battery supplier, with a 40.1% global share in the first four months of 2026, according to SNE Research. The company's decision to restart its own lithium production reduces its dependence on external spodumene from Australian producers such as Greenbushes and Pilgangoora, which have supplied Chinese refineries during the shutdown.
For the broader lithium market, the restart adds a new supply variable at a time when demand signals are mixed. Chinese battery-electric vehicle sales rose 23% year-over-year in May, Morgan Stanley data shows, while battery energy storage system shipments surged 79% in the first quarter. But Wood Mackenzie has flagged a structural slowdown in China's EV market and questioned whether storage installations are keeping pace with shipment data.
The next catalyst for lithium prices will be the pace of CATL's production ramp and the July 1 release of Chinese manufacturing PMI data, which will signal near-term industrial demand. Lithium carbonate at CNY140,000 per tonne sits roughly 30% below the May high and 77% above the June 2025 trough, leaving room for moves in either direction depending on how quickly the Jianxiawo mine delivers new tonnes to market.
This article is for informational purposes only and does not constitute investment advice.
