The Chinese government has sent a working group to Yichun, Jiangxi to investigate reports of illegal lithium mining in the area.

The Chinese government has sent representatives from the ministries of natural resources, industry and information technology, and public security to Yichun, Jiangxi to investigate reports of illegal mining activities within the city area. Simultaneously, the government has shut down mining activities in the area, though processing is permitted to carry on unhindered, leaving lithium producers in the province reliant on inventories in the short-term. It is unclear how long the suspension of mining activity will extend for, with some companies reporting mining activities have already resumed. Jiangxi Special Electric and Yongxing Special Materials Technology have reported mining activities at their Yichun operations have been suspended and are currently unable to continue. It is believed all suspensions will be lifted in mid-March, though most companies will likely be permitted to resume mining activities at an earlier date.

The primary target of these shutdowns appears to be small-scale illegal mining activities, which have grown in number over the last two years supported by increased lithium prices and a tight domestic market for lithium feedstock. While the mining licenses of the larger lithium mining companies within Yichun are likely to be unaffected, supply from smaller or illegal operators could have made it into the supply chains of these larger lithium majors. The nature of the investigation is unlikely to significantly impact lithium production in the area, given it is targeting smaller scale mine operations and processing activity is unaffected. Therefore, the main impact on overall lithium production will likely be an improvement in regulation of the lithium sector in Yichun and the wider Chinese domestic sector.