A little bit of context: the Jianxiawo 枧下窝 mine is a low-grade lithium mine in Jiangxi, China, sitting very high on the global cost curve. CATL, the world’s largest battery maker, acquired exploration rights to this mine in 2022 as part of its vertical integration strategy. Incredibly quickly, the company developed and brought this mine to production in mid-2023 with a nameplate capacity equal to 6-7% of the then-global market size (a smaller share of today’s much larger market). The ramp-up in production of this mine, together with increased supply from Africa, crashed the global lithium price. Through the low-price years, CATL essentially produced from this mine at a loss to continue exerting downward pressure on global lithium prices, sacrificing a loss on 20% of its lithium carbonate used in battery manufacturing in return for a much lower price of the other 80% it bought last year. A ruthless and effective strategy had been executed.
However, this came to a screeching stop in August 2025, when the mine’s mining licence expired and the government was in no hurry to renew it. The low-grade (0.3% lithium oxide) lithium-bearing rock produced at Jianxiawo mine is lepidolite, versus the higher-grade (1.0-1.5%) spodumene ores produced in Australia and elsewhere. Lepidolite contains deleterious heavy metals and its processing resulted in massive pollution issues in the province. Coupled with the anti-involution drive, where the government placed more regulatory restrictions on loss-making over-capacities in various industries, the licence renewal was withheld and the mine remained shut.
Since then, CATL has “cried wolf” multiple times. Upon shutdown, the company told the market it would have little impact on its business and market sources widely reported the suspension would lift “within three months”. Late November, the company made headlines by instructing its supply chain to “prepare for an early Dec 2025 restart”. Similar news emerged around Chinese New Year in the first quarter. None of these materialized, but the lithium price did come under pressure each time, allowing CATL to reap the financial benefits in the short term. It was only in mid-June, when CATL received a new land use pre-approval, followed by a safety production permit, that its mine finally (reportedly) resumed production on the 29th of June.
And it turned out that the mine DID NOT actually resume production!
7 Aug 2026: CATL’s Jianxiawo mine remains non-operational, still in “suspension of production and maintenance”. So basically the lithium market got trolled again and gave CATL a 20-33% discount on all its lithium carbonate inputs for the last couple of months… X Post here
This was just the latest in a string of “crying-wolf” episodes to drive the lithium price lower.
21 Nov 2025: I was going to ask here – what is the next lithium crisis CATL is going to manufacture… and they beat me to it! The key point to note is — their preparations have zero effect on whether the Govt bodies (and there are at least 2) will give them approval. X Post here
The one thing we are sure about: there will be another episode in the (near) future when CATL tells the market the mine is about to reopen!
Leave a Reply