China lithium carbonate rallies as Jianxiawo mine permit pulled

China's lithium carbonate market rallied in late August as delayed restart expectations for a major lepidolite mine in Jiangxi, maintenance outages at some lithium salt producers and accelerating inventory drawdowns tightened near-term supply, although growing expectations of future supply recovery continued to temper the market's bullish sentiment.

The most actively traded January 2027 lithium carbonate contract on the Guangzhou Futures Exchange settled at 159,600 yuan/metric ton ($23,665/mt) on Aug. 28, up 4.8% from the previous session and 0.6% week over week.

In the physical market, Platts, part of S&P Global Energy, assessed battery-grade lithium carbonate at 158,000 yuan/mt DDP China on Aug. 27, up 4.6% day over day or 1% week over week.

The restart of the key Jianxiawo lithium mine has been delayed following the withdrawal of its environmental impact assessment (EIA) acceptance notice.

On Aug. 17, Yichun's ecology and environment bureau published a notice indicating it intended to accept the environmental impact assessment, or EIA, filing for the Zhenkouli-Fengxian Jianxiawo lithium mining project operated by Yichun Times New Energy Mining Co., a unit of Contemporary Amperex Technology Co. Ltd., or CATL.

The development was widely interpreted by the market as a sign that the project could move closer toward resuming production.

However, on Aug. 26, the bureau withdrew the notice, saying some members of the public had raised questions regarding the website used by the project developer for its earlier disclosure process. Authorities said the acceptance announcement would be reissued after the relevant procedures had been reviewed and confirmed as compliant.

The reversal within days reignited uncertainty over the project's timeline for restart.

"At the moment, this is a classic rebound from the bottom," a China-based producer said. "Whether Jianxiawo restarts or not does change the reality of a tight market balance."

"Today, the EIA acceptance notice was withdrawn. Someone filed a complaint and the authorities disclosed the content of the complaint," a China-based consumer said Aug. 26. "In my view, it is unlikely to start production this year."

A China-based trader shared a similar view, adding that progress may not be as fast as many previously anticipated.

However, expectations for the project's eventual restart have not entirely faded, reinforcing market expectations of a broader supply recovery over the longer term.

Meanwhile, Zimbabwean spodumene cargoes have started arriving in China, with market participants expecting import volumes to increase in the coming months.

"Lithium concentrate supply is becoming more available as arrivals from Zimbabwe continue to increase. Imports from both Zimbabwe and South Africa are expected to rise further in September," a second China-based trader said early this week.

On the demand side, production schedules for power battery and energy storage applications remain elevated, while demand is expected to improve further ahead of China's traditional "Golden September, Silver October" peak consumption season.

Against that backdrop, market participants said the pace of inventory depletion and the evolution of supply expectations will remain the primary drivers of price direction.

Therefore, the participants are closely monitoring future supply growth, particularly developments at the Jianxiawo lithium mining project and the expected arrival of additional Zimbabwean spodumene cargoes into China.