The early restart of a key lithium mine in China has triggered a sharp sell-off across Australian mid-cap lithium stocks.
Pilbara Minerals Ltd (ASX:PLS), Liontown Resources Ltd (ASX:LTR) and IGO Ltd (ASX:IGO) all plunged more than 10% in afternoon trade, while Mineral Resources Ltd (ASX:MIN) also recorded significant losses.
Pilbara fell 15% to A$2.04, with Liontown — backed by billionaire investor Gina Rinehart — also down 15% to A$0.805. IGO shed 13% to A$4.19, while MinRes was 7.4% lower at A$35.33.
The sell-off follows overnight reports that Chinese electric vehicle battery giant Contemporary Amperex Technology Co Ltd (CATL) will soon resume operations at its Jianxiawo lithium mine in Yichun, Jiangxi Province. The mine, which accounts for approximately 3% of global lithium supply, had been suspended in August due to an expired permit, with expectations of a three-month hiatus.
The earlier-than-expected resumption of production has sparked renewed fears of oversupply in an already fragile lithium market, putting fresh pressure on producers exposed to softening spodumene prices and demand uncertainty.