Shanghai, December 17, 2025 – Lithium prices in China soared on Wednesday after the Bureau of Natural Resources in Yichun, a major lithium-producing hub in Jiangxi province, announced plans to revoke 27 mining licenses. The move sent the most-active lithium carbonate contract on the Guangzhou Futures Exchange to a session high of 109,860 yuan ($15,592.27) per metric ton, its highest level since June 2024, before closing the day up 7.61% at 108,620 yuan.

Background on the License Revocation

The Yichun Bureau stated that the revocations follow a public consultation period ending on January 22, 2026. According to the official notice, all 27 licenses had already expired, some over a decade ago, and most were originally registered for ceramic clay or limestone mining rather than lithium extraction.

One permit, associated with a lithium-bearing ceramic stone mine held by Jiangxi Special Electric Motor, has already been contested, with the company submitting an objection to local authorities. The permit had expired on September 15, 2024.

Analyst Perspective on Supply Impact

Analysts at Galaxy Futures, a Chinese brokerage firm, noted that the revocation is unlikely to impact current lithium supply, as none of the cancelled permits correspond to active lithium mines. However, the announcement triggered investor concerns about future supply security, contributing to the sharp rise in lithium prices.

The Yichun region has been conducting a series of mining license clean-ups since September 2025. The bureau revoked six licenses on November 27, highlighting the government’s push for regulatory compliance and environmental management in the mining sector.

Market Drivers and Lithium Demand

Lithium prices have been on an upward trajectory since August 2025, partly due to the suspension of mining at the Jianxiawo mine, operated by CATL (Contemporary Amperex Technology Co. Ltd.), after its license expired. Strong demand from the energy storage sector, particularly for lithium-ion batteries used in electric vehicles (EVs) and renewable energy applications, has further fueled the rally.

The renewed price surge underscores the sensitivity of lithium markets to regulatory actions, license revocations, and supply uncertainties, even when current production is unaffected. Investors are closely monitoring China’s lithium regulatory policies, as the country is the world’s largest consumer and producer of lithium carbonate and other battery-grade materials.

Outlook

While analysts expect no immediate disruption to lithium supply, ongoing license reviews and potential future restrictions could influence long-term market dynamics. With global demand for EV batteries and energy storage solutions continuing to grow, any regulatory or operational changes in key production hubs like Yichun may have significant implications for lithium pricing and global supply chains.