Chinese Authorities Expected to Approve Operations at Previously Suspended Mine
Hong Kong's South China Morning Post (SCMP) reported on December 25 (local time) that CATL, the world's largest electric vehicle battery manufacturer, is set to restart operations at China's largest lithium mine.
According to SCMP, CATL is expected to receive approval from authorities to resume operations at the Zhenxiao mine in Yichun, Jiangxi Province, around the time of the Lunar New Year (Chinese New Year) in February 2026. The Zhenxiao mine, which accounts for 8% of China's total lithium production by reserves, had its mining permit suspended in August due to government concerns over oversupply and declining profitability. However, it is reported that the resumption of operations will be approved to regulate lithium supply levels.
Lithium is a key raw material for lithium iron phosphate (LFP) batteries, one of the battery chemistries used in electric vehicles. According to energy market research firm SNE Research, CATL is estimated to hold a 38% share of the global electric vehicle battery market.
CATL counts major Chinese electric vehicle companies, as well as Tesla, BMW, and Volkswagen, among its clients. Since 2017, the company has focused on developing marine electric batteries, supplying batteries to 900 vessels operating on rivers, and is also developing batteries for aircraft and drones, according to SCMP.
SCMP noted, "If operations at the Zhenxiao mine resume, the increased lithium supply could reduce raw material costs for electric vehicles."
According to investment bank UBS, lithium prices have risen by more than 20% since CATL suspended operations at the Zhenxiao mine in August. The price of lithium was 41,000 yuan per ton in mid-2020, but soared to 590,000 yuan in November 2022, an elevenfold increase.
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