China approves CATL mine reserves in relief for lithium outlook

Chinese authorities have green-lit reserve reports from two major lithium producers operating in the mining hub of Yichun, easing concerns around output disruptions at a time when the sector’s excess capacity is under close government scrutiny.

Contemporary Amperex Technology Co. Ltd., whose Jianxiawo mine has been halted since last month, has now received the reserve approval, according to people familiar with the matter, who asked not to be named as they aren’t authorized to speak publicly. That brings the site one step closer to a mining permit and to a restart, though there is no guarantee, they said.

Gotion High-Tech Co. Ltd., which has continued to produce through the period, has also won the approval from the Ministry of Natural Resources, it told Bloomberg News on Monday.

The two miners were among eight asked by authorities in Yichun, in the southern Chinese province of Jiangxi, to submit reports on reserves by the end of September, following an audit that uncovered administrative shortcomings. The lithium hub has been in the spotlight in recent months as supply concerns led to heightened price volatility for the vital battery metal.

The Jianxiawo mine has been the center of the turmoil, after CATL, the world’s largest manufacturer of EV batteries, said in August that it would suspend operations after failing to extend an expired mining permit. Earlier this month, news that executives were now asking employees to ready the resumption of work triggered a slide in lithium stocks and in the price of the material.

Gotion has separately received approval for its mining design and ecological restoration plans at its Yichun site, it said. Its lithium unit is currently allowed to mine at the company’s discretion on production needs, it added.

CATL declined to comment. Yichun’s local government didn’t immediately respond to requests for comment.

(By Annie Lee and Alfred Cang)