Battery Metals and Rare Earths: Lithium, Nickel, Cobalt — 2026-09-04
China's largest lithium mine loses its operating licence due to environmental hurdles, significantly cutting supply forecasts for the remainder of 2026. Simultaneously, Indonesian nickel smelters face production cuts of up to 40% due to El Niño-induced droughts, while US export controls on battery "black mass" pressure Chinese recyclers.
Battery Metals and Rare Earths: Lithium, Nickel, Cobalt — 2026-09-04
Top developments
CATL’s Jianxiawo Mine Loses Operating Licence
Analysts have nearly halved the output forecast for China’s largest lithium mine, Jianxiawo, operated by CATL, after it lost its mining licence earlier this week. The suspension is linked to environmental compliance issues that delay a sustained return to full production. This development exacerbates the existing supply crunch in the Chinese lithium market, where carbonate prices have already surged amid record EV sales.
El Niño Halves Output at Indonesia’s IMIP Smelter Complex
Production at the Indonesia Morowali Industrial Park (IMIP), a critical hub for nickel processing, has dropped by approximately 40% due to severe drought conditions linked to El Niño. This supply shock has pushed global nickel prices toward the US$17,000–US$18,000 per ton range, reversing recent downward trends driven by speculation about increased RKAB (work plan and budget) quotas. The disruption highlights the vulnerability of Indonesian supply chains to climate variability, impacting global nickel availability for stainless steel and battery applications.
US Export Controls Target Battery "Black Mass" and Tungsten
New US export controls implemented this week restrict the export of tungsten and battery "black mass" (recycled battery material) for one year. The measure aims to reserve these materials for domestic buyers but analysts warn that limited domestic processing capacity in the US may hinder supply chain resilience. This policy places additional pressure on Chinese recyclers who rely on imported feedstock, potentially altering global flows of secondary cobalt and nickel.
Local view
Indonesia: Local energy news outlet Bloomberg Technoz reports that commodity analysts are increasingly worried about a decline in Indonesian processed nickel exports to global markets. The focus is on the water scarcity affecting the IMIP smelter cluster, which is essential for converting nickel ore into battery-grade intermediates. The article notes that this climate-driven supply reduction is currently outweighing bearish sentiment related to potential government quota relaxations.
China: Financial media Jinrongjie highlights the strong correlation between lithium futures volatility and specific supply-side shocks. On August 28, lithium carbonate futures surged nearly 5% as traders reacted to tightening supply expectations. The coverage emphasizes that despite high inventory levels earlier in the year, the market is shifting back to a tight balance, with major producers like Tianqi Lithium reporting massive profit increases (up 49x year-on-year) due to price rebounds.
Context & numbers
- Lithium Carbonate Prices: In China, spot prices for lithium carbonate have risen above CNY 150,000 per tonne in late August/early September, marking the highest levels in over a month. This reflects a recovery from earlier dips and aligns with futures data showing the LC2701 contract closing at 159,600 yuan/tonne on August 28.
- Nickel Price Forecast: Following the IMIP production drop, market projections for nickel prices have been revised upward to a range of US$17,000–US$18,000 per tonne, moving away from the lower US$16,750 levels seen in mid-July.
- Chilean Lithium Exports: Chile’s lithium exports reached US$3.2 billion in early 2025, signaling the end of the previous bearish cycle. Current demand forecasts from SQM suggest global lithium demand will exceed 2.1 million tonnes LCE in 2026.
On the radar
- Chinese Rare Earth Suspension Deadline: The one-year suspension of China’s October 2025 rare earth export controls expires in November 2026. Markets are watching closely for any announcements regarding reinstatement or modification of these controls, which would impact global magnet and electronics supply chains.
- Indonesian RKAB Quota Decisions: The Indonesian government is under pressure from the APNI (Indonesian Nickel Miners Association) to increase the 2026 RKAB quota to 270 million wet metric tons. A decision on this quota could significantly alter nickel supply dynamics if relaxed, countering current supply constraints.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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