CATL’s flagship lithium asset has once again been placed on care and maintenance after its environmental permit was revoked. The Jianxiawo mine, capable of producing up to 150,000 tonnes of lithium carbonate equivalent (LCE) per year, failed to establish stable operations after a brief informal restart in July. The return of the major mine to the market has been delayed again, prompting analysts to cut their production forecasts.
Benchmark Mineral Intelligence has reduced its estimate for Jianxiawo’s 2026 output from 62,500 tonnes to 32,000 tonnes of LCE. The revision reflects production already lost during the shutdown and the risk that regulatory approvals could be delayed until the fourth quarter. The forecast for 2027 remains unchanged at approximately 99,000 tonnes for now.
The brief restart in July took place while an unresolved dispute over the mine’s tailings facility was still ongoing and triggered a new wave of complaints. Market sources say more than 70 official complaints were filed, prompting the operator to return to the environmental review process. Completion of the review could be delayed until 2027.
Problems at Jianxiawo began in August 2025, when its mining license expired. China had tightened the classification of mineral resources, bringing the deposit’s lithium-bearing clays under stricter regulatory requirements. In June 2026, CATL obtained permission for safe production, but local authorities insisted on a full environmental review package. Satellite imagery indicated that activity resumed in June, only to stop again during the first week of August.
The latest shutdown comes as the lithium market is beginning to recover. Growing demand for energy storage systems and improving electric vehicle sales are helping the industry emerge from years of oversupply. Albemarle has described demand for stationary battery storage as exceptionally strong, while BYD has struggled to keep up with orders for its Blade batteries.
Authorities are also reviewing mining licenses at other lithium deposits in Jiangxi Province. These operations are estimated to account for around 108,000 tonnes of LCE per year, but inspections could uncover similar issues involving tailings and waste management. Benchmark analysts suggest that some operators may try to accelerate production in order to use their quotas before potential sanctions are imposed.
The prolonged shutdown of Jianxiawo removes guaranteed lithium volumes from the market at precisely the moment when demand is finally beginning to catch up with supply. That creates an unexpected tailwind for lithium prices, but for CATL it means another regulatory headache with no clear resolution in sight.
Source: MINING.COM
Image: Owen Chen | Ganfeng Lithium
