"You're the third group this month to come asking about the mine situation," a villager working at Contemporary Amperex Technology Co.,Ltd.'s (CATL) Jiangxiawo mining site told reporters on August 12. Just two days earlier, a "tour group" of over a dozen people had visited the village. These "tourists" weren't interested in local attractions but focused on the production status of two nearby mining operations.
On August 9, CATL's Jiangxiawo mining site in Fengxin County, Yichun, was forced to halt operations due to mining permit expiration. This facility represents one of Yichun's largest lithium mica mining operations and plays a crucial role in the region's ambition to become "Asia's Lithium Capital."
According to industry statistics, the supporting refinery supplies approximately 10,000 tons of lithium carbonate monthly, accounting for about one-eighth of domestic production and one-tenth of monthly domestic demand. Against the backdrop of already tight supply-demand balance in the third quarter, the mine's shutdown will create a monthly shortage of several thousand tons, directly impacting lithium carbonate price movements.
Field investigations reveal that this shutdown wasn't unexpected, as mining permit renewal difficulties had shown early warning signs. This situation reflects systematic challenges facing the local lithium mica industry: while 14 mineral types including lithium are directly managed by the Ministry of Natural Resources, approval for "lithium-containing minerals" follows a more lenient process.
As the core upstream resource for the new energy sector, lithium mining identity classification cannot be ambiguous, as even minor changes can trigger far-reaching consequences.
**Strict Mine Security, Local Villagers Become "Experts"**
On August 12, reporters attempted to visit CATL's Jiangxiawo mining facility in Fengxin County, Yichun. Security checkpoints were established several kilometers before the mining area, with guards stopping reporters and requesting their departure. Officials refused to disclose any information about mining operations.
Subsequently, reporters visited surrounding villages. A villager from Shangfu Town working at CATL's Jiangxiawo site explained that mine employees mainly come from neighboring provinces, with the facility operating under closed management where staff meals and accommodation are provided on-site, limiting external contact. Meanwhile, Gotion High-tech's mining facility employs more local residents and continues normal operations.
According to the villager, Jiangxiawo mine ceased operations on August 9. While workers remain on-site, mining activities cannot proceed due to expired permits. The company hasn't announced restart timing, which could range from about one month to possibly next year, creating significant uncertainty.
When CATL's Jiangxiawo site commenced production in 2023, another listed company, Gotion High-tech, also established nearby mining operations. These multi-billion yuan investments by listed companies created opportunities for local villagers, as mining work offers substantially higher wages than farming.
However, starting from 2024, village workers noticed changes as mining facilities began implementing planned shutdowns. Villagers explained that their employment contracts typically span three months or less, with maximum terms not exceeding six months. This three-year arrangement primarily considers potential mine shutdowns, minimizing disputes by avoiding continued worker employment during cessation periods.
As lithium carbonate prices plummeted from peaks, villagers' experiences closely matched market conditions. This isn't the first shutdown for CATL's Jiangxiawo site. According to villagers, the most recent closure lasted from late September last year through February this year, when lithium carbonate prices dropped to 50,000 yuan per ton, making production unsustainable for approximately five months.
During shutdowns, workers including local villagers could transfer to other facilities or return home, with the company providing monthly living allowances for those not continuing work.
Local villagers demonstrate remarkable familiarity with lithium carbonate price fluctuations. Even elderly residents watching grandchildren can easily calculate cost structures: using Gotion's mining site as an example, with lithium content around 0.27% (lithium ore grade, representing lithium element content in ore, consistent with institutional data), lithium carbonate prices must reach above 100,000 yuan per ton for profitable mining operations. When prices hit their lowest point of 50,000 yuan last year, both CATL and Gotion facilities temporarily closed due to excessive costs.
During conversations, one villager showed his phone, indicating he monitors lithium carbonate price increases daily. He confidently stated that if prices reached 200,000 yuan per ton, CATL's mine would definitely find ways to restart operations.
**Why Are Mining Permit Extensions Difficult?**
According to CATL's August 11 interactive platform response, the company suspended mining operations after its Yichun project mining permit expired on August 9. The company is processing mining permit extension applications according to regulations and will resume production as soon as approvals are received, with minimal impact on overall business operations.
However, markets questioned why CATL didn't apply for extensions before the August 9 expiration. During the July 30 earnings call, company executives responded that CATL had submitted application materials to Yichun Municipal Natural Resources Bureau according to regulations, with provincial and municipal departments confirming receipt of complete documentation. The company was awaiting approval and maintained relatively optimistic expectations.
This statement was interpreted as signaling the company's active pursuit of mining permit extensions and confidence in application completeness and compliance. However, reality unfolded differently, with CATL's Yichun project (Jiangxiawo) announcing mining cessation just ten days later due to permit expiration.
CATL's Jiangxiawo site shutdown reflects systematic risks in lithium mica extraction. Among currently operating mica mines, except for Baishuishui Cave which mentions lithium mining in actual extraction and utilization mineral types, other mines list almost exclusively ceramic clay and tantalum-niobium minerals in both registered and actual extraction categories.
Industry sources clarify distinctions between lithium mines and lithium-containing mines. Lithium mines (primary mineral resources) require lithium oxide grades ≥0.4%, exemplified by Sichuan's Jiajika spodumene mine. Jiangxi's Yifeng County Zhenkuli-Fengxin County Jiangxiawo ceramic clay (lithium-containing) mine has 0.27% lithium oxide grade, thus registered as ceramic clay (lithium-containing) mine.
During lithium carbonate price surges, despite significant lithium content differences, ceramic clay mines served as important lithium sources due to advantages like large deposit scales. During this period, leading lithium battery companies including CATL, Gotion High-tech, Ganfeng Lithium, and CORUN successively established Yichun operations starting in 2021.
Although Jiangxiawo site grades weren't particularly high, they played important roles in alleviating lithium carbonate supply shortages. At that time, CATL faced raw material price pressures, with Chairman Robin Zeng declaring at investor meetings that if lithium prices remained elevated, "we'll desperately mine more."
Importantly, lithium-containing ceramic clay's economic value directly correlates with lithium carbonate market prices. During new energy vehicle market explosions, lithium carbonate as core battery material saw prices surge from 50,000 yuan per ton in 2021-2022 to historical peaks near 600,000 yuan per ton, with markets once "using everything for lithium extraction."
**"Exploration-to-Mining" Becomes Key Application Node**
Following Jiangxiawo site shutdown news, lithium carbonate prices surged for consecutive days, with industry attention shifting to seven other mining operations in the region facing unclear mining qualification issues.
Industry sources revealed that in July, Yichun Municipal Natural Resources Bureau issued notices requiring reserve verification reports. Besides Yichun Times New Energy Mining Co., Ltd. (Jiangxiawo site), affected companies include Yichun Gotion Mining Co., Ltd., Yichun Shengyuan Lithium Co., Ltd., Yifeng Huaqiao Mining Co., Ltd., Yifeng Huali Mining Development Co., Ltd., Jiangxi Dingxing Mining Co., Ltd., Jiangxi Chunyou Lithium Co., Ltd., and Yifeng Donglian Mineral Development Co., Ltd.
The document emphasized implementing audit rectification requirements, further standardizing mineral resource allocation and registration approval procedures, and protecting state asset interests. These mining companies must compile mineral type change reserve verification reports and scientifically determine primary mining types.
Document reviews show that except for Yichun Times New Energy Mining Co., Ltd., other mining sites have unexpired permits with production operations unaffected by Jiangxiawo shutdown. During recent visits, facilities like Gotion High-tech's Yichun operation continue normal mining with unaffected daily operations.
Notably, revised mining law changes increasingly emphasize actual economic activities in determining mineral types. Senior geological engineer and mining rights appraiser Xie Bin explained that new mineral resource management reforms, particularly Ministry of Natural Resources' "Notice on Further Improving Mineral Resource Exploration and Mining Registration Management" (Natural Resources Regulation [2023] No. 4), designed clear procedural pathways for "lithium-containing mineral" to "lithium mine" transitions.
The core approach follows "broad exploration, strict mining" principles, encouraging comprehensive discovery during exploration while implementing strict review during development, creating a "funnel-type" management system accelerating resource discovery while ensuring orderly development.
For existing mining rights holders in production (such as operating kaolin mines) seeking operational focus and legal status changes to lithium mines, "primary mining mineral type changes" procedures must be initiated. However, successful changes face clear conditional limitations.
Xie Bin noted the core issue isn't whether ore "contains lithium" but whether "lithium value sufficiently supports primary role status." This classification directly determines various mineral type management levels, approval processes, resource reserve evaluation methods, tax payment standards, and supporting technical document requirements under new mining laws.
Following new mining law implementation on July 1, 2025, the State Council hasn't published or adjusted mineral type catalogs and strategic mineral resource catalogs. Under previous mining law implementation detailed mineral type catalogs, lithium belongs to single mineral types, with lithium exploration standards and industrial indicators requiring 1% industrial grade and 0.5% boundary grade.
According to relevant documents, lithium mines fall under Ministry of Natural Resources management, while lithium-containing minerals are approved by local authorities like Yichun Natural Resources Bureau, representing the biggest "variable" for CATL's Jiangxiawo site permit extensions or lithium mine conversions.
One mining company executive indicated that extending ceramic clay (lithium-containing) mining typically processes very quickly, possibly completing within one to two months. However, converting to lithium mine certificates requiring 0.4% or higher grades might prevent certain mines from ever obtaining permits.
**Can Eight Mining Sites Successfully Change Primary Mineral Types?**
According to Yichun Natural Resources Bureau documents, the eight lithium-related mining companies must submit mineral type change reserve verification reports by September 30, scientifically determining primary mining mineral types. However, industry experts see policy uncertainties in primary mineral type changes.
Xie Bin further analyzed that during "exploration-to-mining" and "mining rights extension" procedures, mining rights authorities consider applicant-declared primary mineral types alongside comprehensive geological survey results and actual mining economic activities to evaluate reasonable mineral type declarations, compelling applicants to declare primary mineral types based on actual primary uses.
Using CATL's Jiangxiawo site as an example, existing mining rights holders in production seeking operational focus and legal status transitions to lithium mines must initiate "primary mining mineral type change" legal procedures. Under "Mineral Resource Mining Registration Management Measures," mining rights holders should apply for change registration with management authorities within mining permit validity periods.
Regarding primary mineral type changes, Xie Bin explained that "exploration-to-mining" applications require enterprises to specify primary mining types and associated mineral types based on evaluated and filed mineral resource reserve reports. This represents the first and most direct pathway for "lithium-containing mineral" to "lithium mine" transitions: exploration rights initially targeting kaolin discovery during "comprehensive exploration" reveal associated lithium resources with economic value far exceeding kaolin; enterprises subsequently complete lithium-focused resource reserve reports passing expert review and authority filing; during mining rights applications, "lithium mines" are directly declared as primary mineral types; after completing various applications and approvals, enterprises receive mining permits with "lithium mines" as primary mining mineral types, completing transitions from "lithium-containing kaolin mines" to "lithium mines."
Xie Bin emphasized that mining companies cannot unilaterally change production content based solely on market price fluctuations or internal calculations. They must invest funds, commission qualified institutions for systematic lithium resource supplementary exploration within mining areas, achieve appropriate exploration levels, compile formal resource reserve reports, and successfully pass authority-organized reviews and filings.
Currently, no related companies have disclosed report compilation progress. Industry expert Cao Xusheng indicated that under Ministry of Natural Resources regulations, if reserve reports prove inaccurate by margins exceeding 30%, re-evaluation and filing can occur. If re-exploration discovers mineral types meeting industrial grades, mineral types can be added, but those failing to meet industrial grades fall under comprehensive utilization categories.
These reports represent the only legal basis proving lithium's "primary mineral" status within mining areas. Xie Bin noted that high-standard review processes constitute narrow management "funnel" exits, ensuring all development-stage resources undergo scientific, prudent evaluation, preventing speculation and disorderly development.
**Focus on Lithium Carbonate Price Sustainability**
According to CITIC Futures statistics, excluding Jiangxiawo, other Jiangxi mica mines are expected to supply approximately 101,000 tons LCE this year, with subsequent shutdown speculation potentially continuing price volatility.
Industry chain analysts indicated that current lithium carbonate major cycles remain unchanged, with third-quarter supply gaps. From global lithium resource balance perspectives, this year's supply disruptions are numerous, with demand consistently exceeding expectations, narrowing surplus levels compared to year-beginning. If Jiangxiawo mine continues shutdown, this year's supply will decrease by over 40,000 tons compared to expectations, with other affected mines bringing additional reductions.
According to institutional statistics, current domestic lithium mine markets maintain roughly balanced supply-demand conditions. Data shows Jiangxiawo site and supporting refineries' lithium carbonate supply reaches approximately 10,000 tons monthly, representing about 10% of domestic total demand. Under third-quarter lithium carbonate supply-demand tight balance backgrounds, site shutdowns and potential forced shutdowns of three associated refineries due to raw material shortages could break domestic lithium mine supply-demand patterns, creating monthly supply gaps of thousands of tons.
Three refineries closely associated with CATL's Yichun region Jiangxiawo site include Longpan Times, Wanzai Times, and Fengxin Times. Longpan Times, established in March 2022, represents a joint lithium carbonate refinery created by CATL and Longpan Technology, with Jiangxiawo site serving as important mineral supply source.
Regarding potential lithium carbonate production impacts from Jiangxiawo site shutdowns, Longpan Technology representatives responded that carbonate output will be affected by mining site shutdowns but depends on raw material purchasing situations. Longpan Times maintains production through external lithium ore purchases, attempting to avoid shutdowns if sufficient materials are available.
Despite recent lithium price recoveries, current markets face dual pressures from high-cost inventory and low-cost capacity releases. Lithium mica extraction companies face cost pressures as domestic operations typically exceed 60,000 yuan per ton, causing partial shutdowns. Industry high inventory persists, with SMM data showing 142,400 tons total weekly lithium carbonate sample inventory as of August 7, reaching historical highs.
Conversely, salt lake lithium extraction leverages cost advantages, gradually becoming primary lithium carbonate price anchors. Industry expectations generally place costs between 30,000-50,000 yuan per ton ranges.
Notably, "anti-involution" storms are sweeping lithium battery industry chains. On August 12, China Nonferrous Metals Industry Association Lithium Branch issued "Lithium Industry Healthy Development Initiative," reiterating prevention of "involution-type" vicious competition and actively studying market development trends for reasonable new capacity layouts.
Market participants evaluate short-term core long-short battle focuses on whether eight involved lithium mining companies can submit resource reserve and grade reports by September 30 and subsequent approval timeline lengths.
Lithium mine industry chain source Zhang Xu (pseudonym) analyzed that expired mining certificates prevent continued extraction. Subsequently, whether original mineral types can continue mining or must convert to lithium mines for certificate renewals, and renewal methods if possible, remain undetermined. Despite current lithium prices reaching 80,000 yuan, industry chain supply-demand dynamics continue, with sustainability duration remaining questionable.
CITIC Futures analysis indicates strong short-term market sentiment, with concerns about other mine shutdowns unable to be disproven quickly, combined with CATL shutdown impacts and unexpected downstream production scheduling, creating strong upward momentum. Fourth-quarter demand may weaken following new energy vehicle subsidy reductions, with new supply releases returning supply-demand to surplus conditions and renewed price pressures.