SHANGHAI (Reuters) – Chinese battery giant CATL (300750.SZ) is resuming operations at its lithium lepidolite mine in China’s Jiangxi province, USB said in a note on Thursday, four months after reports the company had suspended production in the area sparked a rally in lithium miners’ shares.
The investment bank said in the note the mine was “currently resuming” operations, based on information from Shanghai Metals Market (SMM), an information provider. The note did not give more details.
UBS declined to comment further on Friday and CATL did not immediately respond to emailed questions from Reuters. SMM did not immediately respond to questions emailed after business hours.
Two battery metals traders who spoke on condition of anonymity said on Friday they had heard mining in the area had resumed.
CATL’s mine in the southern province of Jianxi was a major contributor to rapidly growing supplies of lithium in China, the world’s top processor of the battery material. Reports of its closure in September caused lithium stocks to rally sharply.
In response to questions from Reuters, CATL subsequently said it had adjusted its lithium production in Yichun, Jiangxi province.
Lepidolite mining is more costly than the alternative method of extracting lithium from brine.
UBS analysts attributed the decision to low inventories and the company’s ability to cut costs by mixing production from the site with higher grade ores.
The most-traded November lithium carbonate futures contract on the Guangzhou Futures Exchange closed at 77,800 yuan ($10,675.81) a metric ton on Friday, up 0.3% from Thursday’s close. Prices are down 4.75% from a two-month high notched on January 20.
CATL’s share price on the Shenzhen Stocks Exchange closed at 261.28 yuan per share on Friday, up 3.2% from Thursday.
($1 = 7.2875 Chinese yuan renminbi)
(Reporting by the Reuters Shanghai; Editing by Emelia Sithole-Matarise)
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