The closure of one of the world's largest lithium mines owned by CATL has caused significant changes in the lithium market in China and beyond.
China's Strategic Moves to Control Lithium Oversupply
On August 11, 2025, CATL suspended operations at the Jianxiawo mine in Jiangxi province, which accounts for approximately 6% of global lithium production according to Bank of America. The mining license expired on August 9, and CATL will seek its renewal for at least three months. This action is likely part of a broader campaign by the Chinese government aimed at eliminating chronic lithium oversupply.
Global Market Impact and Stock Market Surge
The market reacted to CATL's mine closure with a sharp increase in lithium stocks. For instance, shares of Albemarle Corporation surged by 9.86% to $82.92. Lithium futures on the Guangzhou Futures Exchange rose by 8%, leading to changes in physical lithium prices. It is expected that producers outside China, particularly in Australia, may benefit from the limited Chinese supply.
Future Perspectives in the Lithium Industry
Experts note that the Chinese government's intervention may lead to further regulatory measures in the lithium sector, potentially tightening global supply chains. There are expectations that lithium prices may continue to rise, especially given the increasing demand from the electric vehicle sector.
The closure of CATL's lithium mine highlights the importance of managing production levels in the context of global lithium demand. This event could alter the dynamics of the international market in the coming months.