Chinese battery giant CATL is shifting its focus upstream, warning that lithium mining has become the industry’s main bottleneck—rather than mineral processing, an area where China is already heavily positioned.
In recent remarks reported by Bloomberg, CATL vice president Jiang Li said the battery supply chain’s critical constraint now lies earlier in the process: extracting lithium and other key inputs. “Processing is not the bottleneck, but mining is,” Li said, adding that CATL aims to strengthen its cost advantage through upstream capabilities.
CATL’s comments mark a departure from earlier warnings from some automakers and supply-chain partners that manufacturing and refining capacity were the tighter points in the chain. Ford, for example, had previously indicated processing constraints were the more urgent issue. Ford is a major Western customer for CATL, and has also used CATL technology in battery production in the United States to manage tariff impacts.
To narrow the gap between mining and refining capacity, CATL plans to expand its mining operations through a new in-house unit. Chen Jinghe, founder of China’s metals miner Zijin, has been named as an adviser. CATL’s current mining portfolio includes projects involving lithium, phosphate and cobalt, with the company seeking to reduce reliance on imported ore handled by non-Chinese firms even as China remains dominant in manufacturing.
The renewed emphasis comes as disruptions have underscored how quickly upstream setbacks can ripple through battery costs and EV availability. One of the clearest examples is CATL’s Jianxiawo lithium mine in Jiangxi province, a major lepidolite operation that restarted after a prolonged interruption tied to a permit dispute. The mine resumed production on June 29, following an almost year-long shutdown. It is among the world’s largest single lepidolite deposits and has annual lithium carbonate capacity of about 100,000 tons.
Before the shutdown, Jianxiawo accounted for an estimated 8% to 10% of China’s lithium carbonate output, making its restart influential for domestic prices. Chinese lithium carbonate futures jumped 8.36% on June 30, closing at 163,360 yuan (about $24,000) per tonne, after the restart news. Analysts say the restart is expected to add more than 45,000 tons of incremental lithium carbonate supply in the second half of 2026, depending on ramp-up schedules.
Even with added supply, expectations of ample inventories and more new output may limit how far lithium prices can rise. One analyst forecast prices between 150,000 and 200,000 yuan per tonne in the second half of 2026.
Lithium pricing matters directly for battery manufacturing economics. Lithium can make up roughly 2% to 12% of battery weight, depending on chemistry. CATL’s scale also amplifies the impact: the company held a 40.1% share of the global battery market—and roughly half of China’s—between January and April 2026, according to SNE Research. That position ties the company’s supply security closely to the broader EV industry.
Alongside the mining push, CATL is investing in sodium-ion batteries as a hedge against lithium volatility. Sodium-ion uses a more geographically abundant input and, in CATL’s framing, can help ramp production when lithium prices move higher. In May, CATL invested an additional 5 billion yuan to build 40 GWh of new sodium-ion capacity in Fujian, bringing the site’s planned total to 149 GWh.
Taken together, CATL’s plan is designed to manage both ends of the battery chain: lock in upstream access to key materials such as lithium, cobalt and phosphate, while diversifying battery chemistry to reduce exposure to price swings when supply falters.
