China lithium mining licence revocation drives price surge

Core Viewpoint - The revocation plan for lithium mining licenses in Yichun, Jiangxi province, has led to a significant surge in lithium prices, raising concerns about future supply in the market [1][2]. Group 1: Price Movement - Lithium carbonate prices have increased to 109,860 yuan ($15,595) per tonne, marking the highest level since June 2024, with a closing increase of 7.61% at 108,620 yuan [1][2]. - The price rally is attributed to the announcement of the cancellation of 27 mining permits, which has heightened investor concerns regarding supply [2]. Group 2: License Revocation Details - The Yichun Bureau of Natural Resources plans to cancel 27 mining permits after a public consultation period ending on January 22, 2025, with all licenses set for cancellation having already expired [2][3]. - Among the revoked licenses, 17 were for ceramic clay, seven for limestone, and others for kaolin and quartzite, with expiration dates ranging from 2010 to 2024 [3]. Group 3: Market Analysis - Analysts from Galaxy Futures indicated that the license cancellations would have a minimal near-term impact on supply, as none of the revoked permits pertain to currently operational mines [4]. - The upward trend in lithium prices has been ongoing since August, influenced by stronger demand from the energy storage sector and the halt of operations at CATL's Jianxiawo mine due to an expired mining license [5].