CATL’s potential early restart of Yichun lithium mine sparks fears of oversupply, sending lithium prices and global miners’ shares sharply lower.
Global lithium miners faced sharp declines on Wednesday following reports that Contemporary Amperex Technology Co. Ltd. (CATL), the world’s leading battery manufacturer, may soon restart production at its shuttered Yichun mine in China. According to Chinese state media, CATL recently organized a “resumption work meeting” for the Jianxiawo mine, signaling that operations could resume much earlier than initially anticipated. This development unsettled global markets, as the mine is a significant contributor to China’s lithium supply chain.
The Yichun operation, particularly the Jianxiawo site, plays a vital role in lithium production, with the capacity to generate more than 46,000 metric tons of lithium carbonate equivalent annually. Based on Australian government data, this volume represents nearly 3% of the projected global supply for 2025. The possibility of such a substantial supply source reentering the market earlier than expected triggered immediate concern among investors and industry stakeholders.
Stock markets reacted swiftly and decisively. In the United States, Albemarle, the largest lithium producer globally, saw its shares tumble by 11.5% in New York. Similarly, U.S.-listed shares of Sigma Lithium dropped 6.9%. The sell-off was even more pronounced in Australia, where Sydney-listed Pilbara Minerals slumped as much as 16.7%, marking the steepest fall among its peers. Other Australian miners such as IGO and Liontown Resources also suffered losses, declining as much as 14.2% and 15.8%, respectively.
The fallout was not limited to Western markets. In China, two major producers—Tianqi Lithium and Ganfeng Lithium—both opened trading about 5% lower. Meanwhile, lithium carbonate futures in China declined by more than 7%, hitting their lowest point in over a month. This broad sell-off underscores the market’s sensitivity to supply fluctuations, particularly given the sector’s fragile recovery following an extended downturn.
CATL had previously suspended the Jianxiawo mine on August 9 after its operating license expired, a move that initially tightened supply expectations. The suspension pushed lithium futures higher and temporarily buoyed mining company shares. However, with the likelihood of a faster-than-expected restart, the market has reversed course, fueling renewed fears of oversupply.
The broader lithium industry is already grappling with multiple challenges. Prices for the mineral have plummeted from pandemic-era highs due to weaker-than-forecast demand growth in the electric vehicle (EV) sector. This mismatch between supply expansion and demand reality has left many producers struggling, with some operating at or near break-even margins, while others face outright losses. The anticipated return of one of China’s most significant lithium operations now raises the prospect of even greater downward pressure on prices, compounding difficulties across the industry.
In short, the prospect of CATL’s Yichun mine resuming production sooner than expected has heightened global concerns about lithium oversupply, sparking sharp declines across stock markets and futures contracts.
