On 17 July 2025, Zangge Mining announced that its wholly owned subsidiary, Golmud Zangge Lithium (Zangge Lithium), was jointly ordered to suspend production by the local Natural Resources Bureau and Salt Lake Administration Bureau.

According to announcements released by Zangge Mining, production was suspended after Zangge Lithium received a notice from local natural resources management authorities. The authorities ordered the cessation of non-compliant mining activities, requiring active rectification to complete legal formalities for lithium resource extraction.    

Zijin Mining acquired a 25% stake in Zangge Mining this year, becoming its controlling shareholder. Zangge Lithium currently possesses 10ktpy of lithium carbonate capacity, with its production base located at the Qarhan Salt Lake in Qinghai. Zangge Lithium is also one of China’s major extractors of lithium from salt lakes.   

This production suspension directly impacted the domestic supply of lithium carbonate supply. After the notice was issued, data from Shanghai Metals Market showed that lithium carbonate futures prices briefly rose by more than 5% on the same day. China’s domestic lithium carbonate prices fell below US$8,300/t in the first half of this year, affected by lithium mining capacity expansion and market oversupply. During this price-sensitive period, the suspension triggered market concerns about future supply shortages, further pushing up prices.   

Additionally, on 7 July, the Natural Resources Bureau of Yichun City issued a notice requiring eight lithium-related mining enterprises to complete the compilation of mineral category alteration reserve verification reports. Yichun in Jiangxi is a major production area for lithium lepidolite.

The combination of these two events reflect increased efforts by government regulators to address extensive mining practices in domestic lithium resources and to strengthen compliance controls over strategic mineral resources.   

Currently, despite oversupply fundamentals persisting in the short term due to previous overcapacity expansion, the weakening trend in lithium carbonate prices remains. However, in the long term, enhanced government oversight raises uncertainties in domestic mineral supply, potentially reshaping the lithium market landscape and supporting price recovery.