BEIJING – China has launched an investigation into suspected illegal mining practices in Yichun city, the “lithium capital of Asia”, the authorities said. The area is reportedly responsible for about one-tenth of the element’s global supply.
The launch of the probe was announced last Friday on the local government’s WeChat account.
The price of lithium, a key component of batteries used in electric vehicles, reached new heights in 2022 as demand for cleaner sources of energy surged.
China is one the world’s leading producers of the metal.
The investigation could entail widespread mine closures and have knock-on repercussions internationally.
Local officials say Yichun, in the south-eastern province of Jiangxi, accounts for as much as 40 per cent of China’s domestic reserves of the lithium-rich mineral lepidolite.
That makes up about 10 per cent of global lithium supply, according to Bloomberg, thus the area’s “lithium capital” nickname.
The alleged malpractice includes the “chaotic” extraction of lepidolite in the mining areas themselves as well as in surrounding natural areas by local residents, domestic media outlet Caijing reported.
The authorities say unlicensed operations in the region have been causing serious problems such as environmental damage and traffic accidents involving mining trucks.
As part of the pending investigation, the duration of which is so far unclear, officials will look into violations and adopt measures that they hope will promote the “healthy development” of the industry, reported Caijing.
Beijing has been ramping up scrutiny of domestic mining operations in recent years, following decades in which lax regulation allowed small-scale private companies to extract huge amounts of resources with limited oversight.
Efforts by regulators have been targeted at adding traceability and order to the industry, with production increasingly concentrated in the hands of several state-owned rare-earth extraction giants.
Yichun city officials have announced that they aim to propel the local lithium battery new energy industry to an annual value of 150 billion yuan (S$29 billion) by 2025. AFP
