FEBRUARY 27, 20232:28AMUPDATED 6 HOURS AGOBeijing probes illegal...

FEBRUARY 27, 20232:28AMUPDATED 6 HOURS AGO

Beijing probes illegal mining activities in Chineselithium hub - Yicai

By Reuters Staff

2 MIN READ

BEIJING, Feb 26 (Reuters) - China’s central government has senta working group to probe illegal mining in the country’s lithium hub Yichun,financial news outlet Yicai reported on Sunday.

Yicai, citing sources, said the probe comesamid a “shutdown and rectification” of lithium producers in Yichun, a smallcity in southern Jiangxi province known by some as Asia’s lithium capital.

News of the probe follows a Yichun localgovernment announcement on Thursday that it was cracking down on criminalactivity in the lithium battery industry, such as unlicensed andenvironmentally damaging mining.

Yichun has 1.1 million tonnes of lithium oxide reserves andaccounts for 12% of global output, according to the South China Morning Post.

One lithium analyst, who declined to be named,told Yicai that the industry optimistically estimates that the shutdown willlast for about a month.

Yichun currently produces between 10,000 tonsand 12,000 tons of lithium carbonate per month, it reported. “If production issuspended for a month, the affected scale may account for about 10% of theglobal market,” the analyst said.

Lithium batteries are a key component in electric vehicles,demand for which has grown rapidly in recent years as climate-consciousconsumers snap up cars with electric powertrains amid soaring fuel prices.

Yichun’s rich lithium reserves have led to a rapid expansion ofthe city’s mining industry that has brought large tax revenues to the localgovernment.

But the industry has also been plagued by over-mining and under-regulation,leading to environmental issues such as local water sources being polluted withthallium, a toxic metal.

The world’s largest battery maker CATL is one of many Chineseconglomerates that own assets in Yichun.

Last December several companies in the city’s lithium industryhalted production as the local government investigated the water quality of ariver that supplies residents. (Reporting by Eduardo Baptista; Editing by JanHarvey)