China lithium probe shuts down chunk of global supply – by Alfred Cang (Australian Financial Review – February 28, 2023)

Singapore | China’s lithium industry is reeling as its top production hub – responsible for about 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 grapple with a close-up inspection by environment officials 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 per cent and 13 per cent of global supply, analysts say, although it is 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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