One lithium analyst, who declined to be named, told Yicai that the industry optimistically estimates that the shutdown will last for about a month.
Yichun currently produces between 10,000 tons and 12,000 tons of lithium carbonate per month, it reported. "If production is suspended for a month, the affected scale may account for about 10% of the global market," the analyst said.
Lithium batteries are a key component in electric vehicles, demand for which has grown rapidly in recent years as climate-conscious consumers snap up cars with electric powertrains amid soaring fuel prices. Yichun's rich lithium reserves have led to a rapid expansion of the city's mining industry that has brought large tax revenues to the local government. But the industry has also been plagued by over-mining and under-regulation, leading to environmental issues such as local water sources being polluted with thallium, a toxic metal. The world's largest battery maker CATL is one of many Chinese conglomerates that own assets in Yichun. Last December several companies in the city's lithium industry halted production as the local government investigated the water quality of a river that supplies residents. (Reporting by Eduardo Baptista; Editing by Jan Harvey)
