China’s lithium industry is reeling as its top production hub — responsible for around a 10th of the world’s supply — faces sweeping closures amid a government probe of environmental infringements.
The crackdown in Yichun, Jiangxi province, follows a local lithium frenzy over the past year as miners raced to feed rampant demand for the battery material — and to benefit from record global prices. Now, they’re grappling with a close-up inspection by environment officials sent from Beijing.
Ore-processing operations in Yichun have been ordered to stop as investigators probe alleged violations at lithium mines, Yicai newspaper reported. That threatens somewhere between 8% and 13% of global supply, according to various analyst estimates, although it’s unclear for how long the immediate shutdowns will last.
The probe in China injects a big dose of uncertainty into a lithium market that’s seeing prices cool — bringing some relief to EV manufacturers — as more global output emerges. Jiangxi province was expected to be a major source of extra supply, from a lithium-bearing mineral known as lepidolite.
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