Lithium prices and mining stocks surged Monday after Contemporary Amperex Technology Co. Ltd (CATL), the world’s largest EV battery maker, unexpectedly shut down one of its biggest lithium mines in China’s Jiangxi province due to an expired permit.
The Jianxiawo mine, a major producer churning out roughly 9,000 tonnes of lithium carbonate equivalent per month, lies in China’s Yichun lithium hub. Its temporary closure pushed spot lithium prices up nearly 4% in a day and over 15% in the past month. Shares in global lithium giants Albemarle and Sociedad Química y Minera (SQM) jumped 11% and 9% respectively, while developers Lithium Americas and Sigma Lithium saw even sharper gains.
The shutdown reflects a broader policy shift under China’s new Mineral Resources Law, in effect since July 1, aimed at halting unregulated expansion and curbing destructive over-competition. Authorities have ordered other Yichun mines to resubmit resource reports by September or risk closure.
While analysts at Citi and China Futures Co. warn the market remains in structural surplus through 2025, Beijing’s clampdown signals an end to the era of cheap, rapid, and loosely regulated Chinese supply growth. That could benefit miners outside China, especially those in politically stable regions with advanced projects.
UK-listed lithium companies are among the potential winners. Rio Tinto (LSE: RIO) is investing $2.5 billion in its Rincon brine project in Argentina, aiming for 60,000 tonnes annual output by 2028. Atlantic Lithium’s Ewoyaa project in Ghana is on track for first production in 2025–26. Kodal Minerals (AIM: KOD) is targeting first output from its Bougouni project in Mali later this year, backed by Chinese funding. European Metals Holdings (AIM: EMH) is advancing the Cinovec project in the Czech Republic, while Savannah Resources (AIM: SAV) is progressing the Barroso project in Portugal — both with potential production starts by 2027–28.
With EV demand expected to triple lithium consumption by 2035, and long-term supply potentially falling short by as much as 40% without major investment, the tightening Chinese regulatory environment could accelerate opportunities for alternative suppliers.
