China’s biggest lithium mine loses licence

CATL's Jianxiawo lithium mine, China's largest in capacity, has been placed back in care and maintenance following the withdrawal of its environmental permit. This setback halts a meaningful resumption of supply to a market tightening due to increased demand for lithium. Benchmark Mineral Intelligence has revised its 2026 mined output forecast for Jianxiawo from 62,500 tonnes to 32,000 tonnes of lithium carbonate equivalent (LCE).

The 2027 forecast remains stable, around 99,000 tonnes. Following a brief informal restart in July, the mine faced complaints and regulatory hurdles, prompting CATL back into the environmental impact assessment process. With a nameplate capacity of close to 150,000 tonnes of LCE annually, Jianxiawo is the biggest lithium operation in China, a key factor in domestic supply.

Resolving the environmental review may take until the fourth quarter of 2026 or into 2027, making the timing of a sustained restart unclear. The mine's troubles began in August 2025 when its mining licence expired amid tightened mineral classification rules. CATL obtained a safety production permit in June 2026 but failed to meet expectations for an earlier restart due to continued environmental paperwork.

Recent satellite images suggest activity resumed in June, but halted again in early August. This disruption highlights the environmental approvals required for Jianxiawo to resume production at full capacity. The setback arrives as lithium demand from stationary battery storage and electric vehicle sales begins to reshape a market oversupplied since the price boom ended in 2022.

Major producers like Albemarle and BYD, facing demand challenges, could feel the impact of Jianxiawo's production uncertainty. The issues at Jianxiawo may spread as authorities inspect other Jiangxi mines, potentially uncovering similar problems and further endangering Chinese lithium supply.