The lithium market surged on Monday, following the news that China’s Contemporary Amperex Technology Co. Ltd. (CATL) halted operations at one of the world’s largest lithium mines in Jiangxi province. Prices on the Shanghai Metals Exchange rallied as high as $10,800 per ton, erasing the entire year’s slump that saw the price touch as low as $8,350 per ton.
The mine in Yichun, often dubbed China’s “lithium capital,” previously supplied as much as 6% of global output. However, following its license expiration on August 9, the company had no other options but to halt production.
Local authorities have recently ramped up inspections after uncovering permit discrepancies across eight mining operations. Officials cited mismatches between licensed rights and actual extraction, along with environmental and quota compliance issues.
Also Read: Tesla Supplier CATL Halts Operations At One Of The World’s Biggest Lithium Mines: Report
“If production disruption is expanded to other mines in Yichun after Sept. 30, the lithium price level could go even higher,” Zhang Weixin, analyst at China Futures, said for Bloomberg.
Fearing overcapacity, Beijing has started to scrutinize its critical minerals sector, eliminating illegal mining and aligning output with environmental standards. The situation in Jiangxi mirrors actions in other regions, such as Qinghai, where authorities have halted lithium extraction pending proper licensing.
In 2025, lithium prices had been under pressure from a supply glut and slowing EV demand, particularly after U.S. policy shifts reduced purchase incentives. But Monday’s news reversed sentiment sharply, pushing the sector higher. Albemarle (NYSE:ALB) surged over 15%, Chile’s SQM (NYSE:SQM) climbed 12%, and Lithium Americas (NYSE:LAC) gained 13%.
Australian equities fared even better, as Pilbara Minerals soared 20%, Liontown Resources 25%, and Mineral Resources 14%.
The biggest short-term winner from the market rattle was Lithium Argentina (NYSE:LAR), rising as much as 28%. The company reported second-quarter production from its Cauchari-Olaroz brine operation up 18% quarter-over-quarter to 8,500 tons, with costs down 8% to $6,098 per ton. The firm is preparing for major expansions while also advancing work on the Pozuelos-Pastos Grandes project.
While the International Energy Agency’s research shows rising demand for lithium, the world is divided on methods of meeting those needs.
Australia, the world’s largest lithium producer, has been doubling down on hard-rock exploration, particularly in Western Australia’s ancient pegmatite fields. Recent geological research by Curtin University has identified deeper mantle-derived magmas as the source of high-grade deposits, potentially opening new exploration frontiers.
Meanwhile, lithium extraction from oilfield brines has gained traction in the Americas. Mexico’s state oil giant PEMEX is the latest firm testing direct lithium extraction technology. Following in the footsteps of industry giants such as Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM), PEMEX is evaluating the creation of a dedicated “PEMEX Lithium” subsidiary to diversify beyond hydrocarbons.
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