YICHUN, China — Three years ago, the road up to the lepidolite pits above this city in Jiangxi Province was so clogged with ore trucks that the police stationed officers at every switchback. On Saturday morning, a single truck passed in two hours, and the driver was carrying construction sand.
Yichun’s local government branded the city the “Asian lithium capital” in 2022, when the metal used in electric-vehicle batteries sold for more than 590,000 yuan a ton and state-owned and private miners alike raced to open pits in the surrounding hills. Battery-grade lithium carbonate traded at about 78,000 yuan a ton, or roughly $10,900, last week, according to the Shanghai Metals Market. Of the 27 mines licensed in the prefecture, 13 have suspended production, and the city’s lithium-related tax revenue fell 61 percent in the first half of the year, the finance bureau reported.
The slump reflects a global glut created by the boom itself. Chinese producers, along with new mines in Zimbabwe, Argentina and Australia, added capacity faster than electric-car sales grew, and a slowdown in E.V. demand in Europe and the United States in 2024 and 2025 left warehouses full. Yichun’s ore, a low-grade mica, was profitable only at high prices; analysts estimate its production cost at between 90,000 and 120,000 yuan a ton, above the current market.
“The whole city borrowed against a number that no longer exists,” said Zhou Liwen, an economist at Nanchang University who studies the province’s resource industries. “Hotels, a stadium, the new technology park. The question now is what to do with the infrastructure of a boom that lasted 30 months.”
For workers the adjustment has been abrupt. Luo Jianguo, 44, drove an ore truck for a private miner until April, earning as much as 14,000 yuan a month at the peak. He now works in a packaging plant for 4,800. His employer still owes him two months of wages. “Everyone said lithium was the new oil,” he said. “Nobody said oil also goes down.”
Environmental costs are coming into view as well. Processing lepidolite produces large volumes of tailings rich in thallium and fluoride; in 2023, the city shut its municipal water intake for a week after elevated thallium levels were found in the Jin River. A provincial inspection in August identified 41 tailings ponds in the prefecture, 11 of them at idle mines whose operators have not posted remediation bonds. The provincial environment bureau has said it will seek court orders to seize assets where owners cannot be found.
Some in the industry argue that the current prices will not last. Chinese E.V. sales rose 19 percent year over year in September, and new battery chemistries that require less lithium have been slower to scale than expected. A manager at one of the larger mines still operating said the company was treating the downturn as a chance to buy neighbors cheaply. “Those who survive to 2028 will own the hills,” he said, speaking on the condition of anonymity because he was not authorized to discuss the company’s plans.
At the technology park, built for battery suppliers that never arrived, the city has rented part of a hall to a company that makes robotic vacuum cleaners. Mr. Luo’s packaging plant is in another wing. “It is still a job,” he said. “It is just not the future they printed on the billboards.”
A version of this article appears in print on Oct. 12, 2026, Section A, Page 6 of the European edition with the headline: In China’s Lithium Heartland, a Price Collapse Empties the Mines That Built a Boom.
