Lithium market erupts as CATL shuts one of world’s biggest mines

Lithium prices and stocks spiked on Monday after battery giant Contemporary Amperex Technology Ltd. halted operations at a major mine in China, spurring speculation that Beijing might move to suspend other projects as it tackles overcapacity across the economy.

Tianqi Lithium jumped as much as 19% in Hong Kong, while Ganfeng Lithium Group surged 21%, and Australian miners rallied, after CATL confirmed it had shut the mine in Jiangxi province. Prices of the battery metal on the Guangzhou Futures Exchange surged by the daily limit.

The fate of the CATL mine — the biggest in China’s lithium hub of Yichun — had been under close scrutiny for weeks, amid speculation that authorities wouldn’t extend its license. The mine accounts for some 6% of global output, according to Bank of America, while other mines in the region account for at least another 5%.