CATL poised to bring Yichun lithium output back online after licence lapse

Contemporary Amperex Technology Ltd (CATL), the world’s biggest maker of electric-vehicle batteries, is set to restart a major lithium mine in eastern China, in a move that could ease raw material costs for the EV supply chain.\nJiemian News, a Shanghai-based financial outlet, reported that the Yichun mine in Jiangxi province was expected to receive regulatory approval to resume operations shortly before or after the nine-day Lunar New Year break, which begins on February 15. CATL declined to comment.\nLithium is a core ingredient in lithium iron phosphate (LFP) batteries, one of the most widely used chemistries in mass-market electric cars.\nA restart would restore supply from a site that has been offline since August, when its operating licence expired, and could strengthen CATL’s output capacity at a time when carmakers are pushing suppliers to cut costs.\n“CATL, as the bellwether EV battery producer, has been closely monitored by industry officials and analysts since its output could have a huge impact on the cost of constructing electric cars,” said Chen Jinzhu, chief executive of consultancy Shanghai Mingliang Auto Service. “A higher output of lithium will knock down prices of the material and make EV batteries cheaper.”\nUBS said in a research report last year that CATL’s Yichun mine could account for about 8 per cent of China’s total lithium output. Lithium prices have risen more than 20 per cent since August to around 110,000 yuan (US$15,650) per tonne.\nCATL’s Hong Kong-listed shares fell 1.3 per cent to HK$508.50 on Thursday morning, while its Shenzhen-listed stock dropped 1.4 per cent to 370.18 yuan.\nIn August, CATL said it had submitted an application to restart operations and that the temporary halt would have only a limited impact on its business.\n\nThe market has seen sharp lithium-price swings before, particularly in 2021 and 2022 as EV adoption surged on the mainland. In November 2022, spot prices were around 590,000 yuan per tonne, up nearly 15-fold from about 41,000 yuan in mid-2020.\nCATL, headquartered in Ningde in Fujian province, held a 38 per cent share of the global EV battery market this year, according to Seoul-based consultancy SNE Research. Industry analysts estimate that 1 gigawatt-hour of battery capacity could supply up to 20,000 EVs, each with a range of about 500 km.\nBeyond passenger vehicles, CATL – whose clients include Tesla, BMW and Volkswagen – has been expanding into other electrification niches. The company said it began developing marine applications in 2017 and has since supplied batteries to 900 vessels operating on rivers.\nIt recently said Yujian 77, China’s first pure-electric cruise ship fitted with CATL’s high-performance battery system, had been offering tourists a zero-emission, low-noise experience since entering service in July.\nCATL said its battery deliveries to shipbuilders now accounted for about 40 per cent of the global electric vessel market.\nIn November, its subsidiary Autoflight, an aircraft and drone maker, launched a waterborne “vertiport” designed to support electric vertical take-off and landing (eVTOL) operations.\nThe battery-powered platform was intended to extend eVTOL infrastructure across large water areas by providing alternative sites for take-off and landing.\n