CATL Suspends China’s Top Lithium Mine on Permit Loss

Contemporary Amperex Technology (SZSE:300750,HKEX:3750) (CATL) has placed its Jianxiawo lithium mine back on care and maintenance after Chinese regulators revoked the site’s environmental approval, indefinitely stalling the country’s largest lithium operation by capacity.

According to a report by Benchmark Mineral Intelligence, CATL had secured a safety production permit on June 29, 2026, and satellite imagery indicated that site activity resumed shortly after. However, the informal restart bypassed an unresolved dispute regarding the mine’s tailings pond, triggering more than 70 formal complaints.

Authorities halted the operation during the first week of August, forcing CATL to re-enter the environmental impact assessment process.

BMI responded to the closure by slashing its 2026 mined output forecast for the Jianxiawo project by nearly half, lowering the projection to 32,000 tons of lithium carbonate equivalent (LCE) from an initial 62,500 tons.

The price reporting agency maintained its 2027 production forecast at approximately 99,000 tons, though it warned that the environmental review could stretch into next year.

Jianxiawo holds a nameplate capacity approaching 150,000 tons of LCE annually. The project has navigated permitting hurdles since August 2025, when its initial mining license expired just as Beijing introduced stricter mineral classification standards for lithium-bearing clay deposits.

Across the energy transition sector, a demand resurgence is growing. Following a protracted period of market oversupply that crashed prices after the 2022 peak, lithium consumption is accelerating.

For instance, Albemarle (NYSE:ALB), the world’s largest lithium producer, recently characterized demand from the stationary battery storage sector as "off the charts" in a recent earnings call.

This renewed consumption has driven record trading volumes and open interest for lithium carbonate futures on the Guangzhou Futures Exchange, prompting the exchange to cap new positions and increase trading fees to manage sharp price swings.

However, the regulatory crackdown in Jiangxi province presents a wider risk to domestic Chinese output. Regional authorities are actively investigating mining licenses across the province, which is projected to produce roughly 108,000 tons of LCE from other operations in 2026.

Analysts noted that inspections could reveal similar tailings and waste deficiencies at neighboring sites, threatening additional supply. Conversely, the threat of unfavorable inspections might incentivize regional producers to accelerate extraction to maximize quotas before potential shutdowns.

Despite the domestic struggles, the manufacturer continues to diversify its raw material supply chain. In July 2026, CATL and Hong Kong-based Lochpine Capital acquired a combined 20 percent strategic stake in New Zealand-based CarbonScape.

The partnership aims to commercialize forestry-based bio-graphite by the end of the decade, seeking an alternative to the oil-based feedstocks that currently dominate battery anode manufacturing.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.