CATL's Jianxiawo lithium mine faces 18-month delay after land approval canceled

Lithium carbonate equivalent prices have surged 86% year-to-date to above $20,000 per tonne on the CME, as the prolonged suspension of CATL's Jianxiawo mine tightens Chinese supply, according to Benchmark Mineral Intelligence data.

"The cancellation of the land pre-approval means CATL must restart the entire permitting process, which typically takes 12 to 18 months," a person familiar with Jiangxi mining approvals said. "This is not an abandonment of the project but a procedural reset."

The Jiangxi Provincial Department of Natural Resources approved the cancellation of the Construction Project Land Pre-examination and Site Selection Opinion submitted by Yichun CATL, the mining subsidiary of Contemporary Amperex Technology Co. Ltd. (03750.HK). CATL obtained the mining rights for Jianxiawo in 2022 under a three-year license that expired Aug. 9, 2025. Operations have been suspended since. A CATL representative said the company is unclear on the situation but believes it will not easily give up on the project, according to a company statement.

Jianxiawo has an annual nameplate capacity of 150,000 tonnes of lithium carbonate equivalent, making it one of the largest single lithium assets globally, per Benchmark Mineral Intelligence. The mine's output loss has accelerated inventory drawdowns along China's processing chain, with lower stock levels making lithium pricing more sensitive to any sign of further supply disruption, such as Zimbabwe's unexpected raw materials export ban in February 2026.

Lithium Supply at a Crossroads

The Jianxiawo suspension has been the single largest swing factor in lithium price forecasts over the past 12 months. At the peak of speculative activity in November 2025, the Guangzhou Futures Exchange traded 27 million futures contracts and 12.5 million option contracts, each representing one tonne of lithium carbonate — dwarfing the global lithium market of under 2 million tonnes annually. The exchange raised trading fees and margins before activity subsided.

BMI believes lithium is already overpriced and forecasts a material decline in the second half of 2026 as higher prices incentivize the restart of idled capacity. BNP Paribas argues that prices have diverged from fundamentals because of over-exuberance in futures pricing and supply-chain order flow, forecasting a continued supply surplus this year and next. Even bullish analysts such as Citi are cautious on timing, with an upside target of $32,000 per tonne for the CME hydroxide contract carrying a three-month sell-by date.

The broad consensus is that any lithium price boom will be short-lived and less intense than previous spikes. Ultimately, everything depends on how long it takes the Bureau of Natural Resources of Yichun to grant CATL a new mining license — a process that now faces an additional 12 to 18 months of permitting delays.

This article is for informational purposes only and does not constitute investment advice.