Global lithium producers tumbled on Tuesday after Contemporary Amperex Technology (CATL) (OTCPK: CYATY), the world's largest battery maker, announced that it is preparing to resume operations at its Jianxiawo mine in Yichun, Jiangxi province, earlier than expected.

The mine, one of China's largest lithium sources, produces over 46,000 metric tons of lithium carbonate equivalent annually, roughly 3% of the world's projected supply in 2025, according to Australian government estimates. CATL had halted operations on August 9 following the expiration of its mining license, sending futures higher and lifting lithium stocks globally. At the time, the shutdown was expected to last at least three months.

However, an early restart adds a fresh supply pressure to an already overwhelmed market.

Also Read: Tesla Supplier CATL Halts Operations At One Of The World’s Biggest Lithium Mines: Report

Albemarle (NYSE:ALB), the world's largest lithium supplier, sank 11.5% in New York trading, while Sigma Lithium (NASDAQ:SGML) dropped 6.9%. In Australia, Liontown Resources (OTCPK: LINRF) led declines with an 18.4% plunge, while Pilbara Minerals (OTCPK: PILBF) shed over 17%. Lithium carbonate futures in Shanghai fell more than 7% to a one-month low.

The lithium market has been under sustained pressure for more than a year, with prices retreating sharply from pandemic-era highs. Spot lithium carbonate prices in China, which peaked above 600,000 yuan ($84,000) a ton in late 2022, now trade below 73,000 yuan ($10,250). Analysts point to slower-than-expected growth in electric vehicle demand, continued month-on-month supply increases in China, and a wave of new mines ramping up production across Australia, Africa, and South America.

Despite the slump, the sector continues to attract strategic deals, as long-term optimism about lithium's role in the energy transition remains. These market conditions make lithium a commodity suitable for contrarian investors.

In Chile, state miner Codelco and Sociedad Química y Minera de Chile (NYSE:SQM), the world's second-largest lithium producer, are closing in on finalizing a partnership for the Atacama salt flats. The deal, mandated under President Gabriel Boric'snational lithium strategy, will give Codelco majority control in exchange for SQM extending its operating rights to 2060. While hailed as "historic" for ensuring public oversight, critics argue the pact undervalues Chile's resources and risks significant fiscal losses, mining.com reported.

Meanwhile, Australia's Jindalee Lithium (OTCQX:JNDAF) is advancing plans to create a new U.S.-listed lithium company through a merger of its McDermitt project in Oregon-Nevada with a special-purpose acquisition vehicle.

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McDermitt is among the largest lithium resources in the U.S., holding over 21 million tons of lithium carbonate equivalent. A recent pre-feasibility study outlined potential annual production of 47,500 tons over more than six decades, positioning it as one of the key projects for U.S. critical minerals independence.

Price Watch: Global X Lithium & Battery Tech ETF (NYSE:LIT) is up 23.85% year-to-date.

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This article Lithium Miners Sink As CATL Prepares To Restart, Large Deals Continue In The Background originally appeared on Benzinga.com

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