‘Asia’s lithium capital’ grinds to a halt as output of battery material stops in Yichun amid pollution investigation in Jiangxi province’s Jin River

Some leading producers in China’s Yichun city, “Asia’s lithium capital”, have halted production amid an investigation by the local government into the abnormal water quality of Jin River, the main source of the city’s residential water supply, prompting concerns about the underbelly of lithium production.

Last week, Shenzhen-listed lithium salt producer Yongxing Special Materials Tech said in a statement that it had halted its lithium carbonate production line in Yichun, in the southeastern Jiangxi province, to facilitate the investigation.

Shenzhen-listed Anshan Heavy Duty Mining Machinery and Shanghai-listed KangLongDa Special Protection Technology, two other major lithium producers, also announced a temporary halt at their lithium carbonate plants in the city, but did not specify why. All three firms did not respond to requests for comment.

The companies did not disclose when they would resume production, and an estimate by market intelligence provider Shanghai Metals Market suggests the production halt is likely to affect 3,000 to 4,000 tonnes of lithium carbonate equivalent.

“The new energy industry has seen vigorous development in recent years, and the energy metal smelting capacity has rapidly expanded, but environmental protection in the production process has been neglected,” Zhou Zhe, analyst at Shenzhen-based Essence Securities, said in a report published on Sunday.

“After this incident, we don’t rule out the possibility that heavy-metal pollution may become a restricting factor for the development of non-ferrous metals and the new energy industry. The prevention and control of heavy-metal pollution are extremely urgent.”