LKE, page-107

Most of you would have seen coverage of the terrible flooding happening right now in China. One does not wish these kinds of things on anyone, anywhere but you have to consider what the impacts might be to the Lithium sector if mining or processing facilities are located in the affected region.
I have copied below an AI search for information conducted by a fellow Investor in another forum I'm a member of for background.

1. from AI - "Flooding in Southern and Central China Poses Potential Risk to Hard-Rock Lithium SectorWhile China's high-altitude lithium brine operations in Qinghai and Tibet have been spared from the recent devastating floods, several of the nation's key hard-rock lithium mining and processing hubs are located in provinces that have been significantly impacted by the severe weather in June 2025. However, specific reports detailing damage or operational disruptions at these facilities remain scarce.The provinces of Hunan and Jiangxi, both significant centres for lepidolite mining, have been among the hardest hit by the recent torrential rains and subsequent flooding. Hunan province, in central China, has experienced record-breaking floods, leading to widespread evacuations and significant damage to infrastructure. Similarly, Jiangxi province in the southeast, home to the major lithium hub of Yichun, has also been grappling with severe flooding and has been under high alert. Yichun is often referred to as Asia's "lithium capital" due to its substantial lepidolite resources and processing capabilities.Sichuan province, a major source of spodumene, a key lithium-bearing mineral, has also been on high alert for flooding and secondary disasters like landslides. While not as severely impacted as Hunan and Jiangxi, the risk to mining operations in the mountainous regions of Sichuan remains.Furthermore, Zhejiang province, where major lithium chemical processing and battery component manufacturing facilities are located, including in the cities of Rugao and Zhangjiagang, has activated emergency responses to flooding. These plants are crucial for converting raw lithium materials into the high-purity chemicals required for battery production.

   
   

   
   

   
   

   
   

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2. [:43 AM]

   Despite the confirmed presence of severe flooding in these key lithium-producing provinces, there have been no official statements or widespread media reports as of late June 2025 confirming specific damage or the suspension of operations at any of China's major hard-rock lithium mines or processing plants. The lack of specific information could be due to a focus on the broader humanitarian and infrastructure crisis, or a potential downplaying of impacts on critical industries by authorities.In summary, while there is a clear geographical overlap between the recent floods and China's hard-rock lithium industry, the direct impact on specific mines and processing facilities remains unconfirmed based on available public information. The situation in Hunan, Jiangxi, Sichuan, and Zhejiang will be closely watched by the global lithium market for any potential disruptions to the supply chain."

Credit to "Split"

Coverage on this seems pretty sparse, so we will keep an eye on the situation and how it may impact China's Lithium sector to see if there is any flow through at a higher level. Thoughts go out to the people in the regions affected by this natural disaster.

Historically, major flooding events in areas where significant players mine a commodity under high demand have resulted in significant impacts to pricing of that commodity in the general market. Being also significantly invested in Uranium, an example that comes to mind is the 2003 flood of the McArthur River Uranium mine in Canada. Whilst the flood wasn't the only contributing factor, it did spark a "melt your face off" rally in the Uranium Spot Price at the time. A bit more context is copied below for reference...

1. "The 2003 flooding of the McArthur River uranium mine in Saskatchewan, Canada, did contribute to a sharp rise in the uranium spot price, though it wasn't the sole factor. The flooding, which occurred due to a cave-in and water inflow during excavation, temporarily halted production at the mine, a major supplier of uranium. This supply disruption, combined with other factors like increased demand for nuclear energy and speculation, led to a significant increase in uranium prices. Here's a more detailed explanation:Flooding Incident:The 2003 flooding at the McArthur River mine, caused by a cave-in during excavation, resulted in the mine being shut down for several months for repairs. Supply Disruption:The McArthur River mine was a significant producer of uranium, and its temporary closure created a supply shortage in the market. Market Reaction:This supply disruption, combined with increased demand for uranium due to the growing popularity of nuclear energy, caused the uranium spot price to surge. Speculation:The price increase was further fuelled by speculation from investors who anticipated further price rises due to the supply concerns. Other Contributing Factors:While the McArthur River flooding was a key event, other factors also played a role in the price increase, including the depletion of premium uranium deposits and the need for new mine development. Long-Term Impact:The flooding at McArthur River, along with other supply-side challenges, contributed to the long-term upward trend in uranium prices seen throughout the 2000s."

   
   

   
   

   
   

   
   

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2. [2:15 PM]

Now, I'm not saying that the same thing is going to happen in the Lithium market (and, if I were a betting man, I wouldn't expect anywhere near as big an impact)....but you have to acknowledge that there are some quite striking similarities in the circumstances present.

Let's see how this pans out.