China’s Lithium Mining Industry Grapples with Price Slump and Costly Extraction Process

The downturn in lithium prices, exacerbated by softening electric vehicle (EV) demand, is impacting China’s lithium mining sector. The significant drop in global lithium prices has led to production cutbacks and job losses worldwide. In China, where lepidolite mining accounts for a significant portion of lithium output, the costly extraction process is becoming increasingly unsustainable amidst the prolonged price slump.

Analysts predict a slowdown in lepidolite mining activities, while other lithium mining methods, such as brine extraction in South America, continue to expand due to their comparatively lower costs. Despite China’s efforts to boost domestic lithium production, projects like CATL’s Jianxiawo mine face challenges, with production curtailment becoming a real possibility amid negative margins and high operational risks.