Citi: Signs of restart at Yichun lithium mine put global supply risk premium at risk of easing

How far has the Jianxiawo mine restart progressed?

Citi’s on-site industry research indicates that mining operations have resumed at CATL’s Jianxiawo lepidolite mine, about 14 months after production stopped when its mining permit expired on 9 August 2025; the news has not been officially confirmed.
The Yichun Municipal Ecology and Environment Bureau announced on 22 October that it intended to approve the project’s environmental impact assessment, with the public consultation ending on 28 October. Formal environmental approval, a new mining permit listing lithium as the primary mineral, and a statement from CATL are still pending.
The mine’s original permit registered it as a ceramic clay mine with associated lithium. The new Mineral Resources Law lists lithium as a separate mineral, so renewing the permit requires changing the registered mineral, re-verifying resources and submitting a lithium mine environmental impact assessment. Local authorities previously denied reports of a restart in June 2026 and July, so Citi will wait for the permit to be published before confirming this restart.

Citi estimates that, at full capacity, the Jianxiawo mine would produce the equivalent of approximately 100 thousand tonnes of lithium carbonate annually, or about 6% of the bank’s forecast for global lithium supply in 2027. The restart would reduce some of the supply risks that had supported lithium prices for 2027.
After mining resumes, the way the ore is processed remains to be seen. Citi does not yet know whether beneficiation at the mine, third-party toll processing or sales and shipments have resumed. If the ore is transferred to third-party plants in Yichun for processing, the bank expects a slower production ramp-up and a higher unit cost for ore with a lithium oxide grade of approximately 0.25%.
Jianxiawo also offers a case for monitoring permit renewals at other lepidolite mines in Yichun: if licensing obstacles are resolved, other supply previously constrained by regulatory risks could also change.

On 29 October, the Guangzhou Futures Exchange’s lithium carbonate contract for January 2027 closed at 88360 yuan per tonne, down 8.4% on the day, its lowest since November 2025 and approximately 60% below its peak in May 2026; SC6 spodumene prices fell 26% that month.
Citi said Chinese investors it spoke to last week were already relatively pessimistic about the lithium market in 2027, especially compared with overseas investors; a mine restart in November would further depress market sentiment. The bank expects lithium-related stocks to react negatively.
Demand is also weak: the top five battery cell manufacturers’ production plans for November are down 2% month on month. Citi believes that if production falls further in December, inventories on the Guangzhou Futures Exchange could stop declining and lithium prices would lose a major source of support.