By Amy Lv and Lewis Jackson
BEIJING (Reuters) -Chinese lithium producer Qinghai Salt Lake said on Thursday that compliance investigations in Qinghai province into mining licences for the metal used in making electric vehicle batteries are part of a new trend of stricter supervision in the sector.
The investigations into mining licenses are part of a harder line being taken by regulators, Qinghai Salt Lake said in a filing to the Shenzhen Stock Exchange, in response to investor questions about the subject.
Qinghai Salt Lake said its own mining business is “fully compliant, and production and operation are stable.”
In July, local officials ordered Zangge Mining to shut a mining unit in Qinghai province for “non-compliance”. And in August, Contemporary Amperex Technology (CATL) said it shut a unit in Jiangxi province because of an expired licence.
While provincial officials have provided few details about the sudden crackdown, it coincides with a broader campaign against overcapacity in Chinese industry that was initiated in early July by President Xi Jinping.
The prospect of lower mining output triggered a huge rally in lithium prices in August. Prices have since retreated, however, after a miner secured a license in the lithium hub of Yichun in Jiangxi province last week, easing fears that more production would be suspended.
(Reporting by Amy Lv and Lewis Jackson in Beijing; Editing by Jacqueline Wong and Tom Hogue)
