A drop in lithium prices is impacting China's mining of the metal, which is used in electric car batteries, Reuters reported on Thursday. This, along with expensive extraction processes, is leading to a revaluation of production growth and new projects. Global lithium prices have fallen over 80 per cent in the past year due to softening EV demand, prompting many producers to halt production and cut jobs. In China, a significant lithium producer, the mining of lepidolite, a costly source of lithium, is expected to suffer as prices remain low. Analysts predict a slowdown in lepidolite mining in China and globally, with a shift towards more cost-effective sources like brines in South America. China's mined lithium output growth forecast for 2024 has been reduced to 12 per cent from 54 per cent, mainly due to the lepidolite slowdown. Lepidolite accounted for nearly half of China's lithium output in 2023, but its high processing costs make it less economically viable compared to brine and spodumene sources. The current spot lithium carbonate prices in China have dropped significantly from previous highs. Despite a futures rally post-Lunar New Year, analysts expect spot prices to remain around 100,000 to 120,000 yuan in 2024.
