CATL's Yichun Zaoxiawo lithium mine fails to resume production, local market faces shortage
On December 5, reports confirmed that CATL's Zaoxiawo lithium mine in Yichun, Jiangxi Province did not resume production as rumored. The mine's operating rights, which began on August 9, 2022, expired on August 9 this year, leading to a halt in operations.
Local traders revealed that despite expectations of a restart, no production occurred on December 5. With demand continuing to expand, several lithium mining companies remain suspended, leaving the local market without available lithium ore. Prices for lepidolite ore with a grade of 1.0 have surged to ¥400 per ton (about $55 per ton) after secondary lithium extraction.
One trader explained that last year he purchased 70,000 tons of lithium ore from CATL's mine, but all of it was sold out by March and April this year. The suspension of Zaoxiawo, combined with exhausted mining quotas at other companies, has resulted in widespread shortages.
Yichun is known as the "lithium capital of Asia," with the richest lepidolite deposits in the region. Public data shows that the Zaoxiawo mining area contains about 960 million tons of porcelain stone ore, including 2.6568 million tons of associated lithium oxide-equivalent to 6.57 million tons of lithium carbonate equivalent (LCE). Before the shutdown, the mine produced between 7,000 and 8,000 tons of LCE per month, accounting for roughly 10 percent of China's domestic demand.
According to an earlier assessment report by the Yichun Municipal Bureau of Natural Resources, the mine required a construction investment of ¥2.158 billion (about $297 million). Recoverable reserves were estimated at 774.92 million tons, with a projected service life of 25.8 years based on an annual production scale of 30 million tons.
CATL (Contemporary Amperex Technology Co., Limited), founded in 2011 and headquartered in Ningde, Fujian Province, China, is the world's largest manufacturer of lithium-ion batteries for electric vehicles and energy storage systems. The company supplies major automakers including Tesla, BMW, and Volkswagen. In addition to battery production, CATL has invested heavily in upstream lithium mining projects to secure raw material supply. Its Zaoxiawo mine in Yichun represents one of the largest single lepidolite deposits globally, underscoring CATL's strategy to integrate resources and maintain leadership in the EV battery industry.
