LITHIUM producers in Australia and the US declined sharply after Chinese regulators approved a reserve report from a major lithium operation, alleviating some concerns regarding potential output disruptions, said Bloomberg News.
Liontown Resources fell as much as 9.9%, whilst Pilbara Minerals dropped 7.9% and IGO slipped six percent during Sydney trading on Wednesday morning. Key US producers including Albemarle and SQM retreated overnight.
The declines followed Bloomberg’s report on Tuesday that Chinese authorities had approved the reserve report for a Contemporary Amperex Technology mine operating in Yichun city, according to sources familiar with the development.
Operations at CATL’s Jianxiawo lithium facility have been suspended since August following failure to extend an expired mining permit. The reserve report approval moves the site closer to potential restart, though no guarantee exists, the people said.
The lithium sector has contended with global oversupply compounded by weakening electric vehicle demand. Prices for the battery material have experienced significant volatility recently amid government scrutiny and supply concerns surrounding lepidolite production in China, which would have represented 11% of worldwide supply this year before licensing complications, according to consultancy CRU Group forecasts.
Gotion High-Tech, which maintained production throughout the period, has also secured reserve report approval from China’s Ministry of Natural Resources.
Martin Jackson, head of battery raw materials at CRU, said anecdotal reports suggested “very proactive and supportive engagement” from the ministry, adding authorities were expected to adopt a “market-aware approach” to licensing matters.
