(Yicai Global) Dec. 5 -- Shares of Yongxing Special Materials Tech, Anshan Heavy Duty Mining Machinery, and KangLongDa Special Protection Technology fell after the three Chinese firms halted output at their lithium carbonate plants amid an environmental investigation of an important river in a city known as the ‘lithium capital of Asia.’

Yongxing [SHE: 002756] slumped 7 percent to close at CNY94.59 (USD14). Anshan Heavy [SHE: 002667] slid 2.7 percent to CNY27.69, while KangLongDa [SHA: 603665] closed 0.2 percent up at CNY36.28, following a slump of as much as 6.1 percent intraday.

The three firms made their respective announcements last week, with one of them acknowledging that the reason was an environmental probe initiated by the Yichun city government in China's eastern Jiangxi province.

On Nov. 29, Yongxing said that the company's lithium carbonate production line in Yichun would be temporarily closed due to the abnormal water quality of the Jin river, which has prompted an investigation. The river is the main source of drinking water for residents in the region.

But Yongxing’s announcement did not mention any links between the government probe with its possible violation. Anshan Heavy and KangLongDa blamed their halts on an ongoing road project in the industrial park where their plants are located, according to statements they put out on Dec. 1 and 2, respectively.

The three facilities are located less than 20 kilometers away from each other, and all are located neat the Jin, according to a report by Shanghai Securities News.

Yichun has lately been tightening its control over pollution by local lithium processing. The city government issued a document early last month that reminds its county-level governments to pay more attention to the environmental hazards caused by lithium carbonate plants, according to Shanghai Securities News.

Yongxing did not estimate the exact impact of suspension on its lithium carbonate plant, but it disclosed that for the first three quarters of this year, the plant sold 13,800 tons of lithium carbonate. 

Anshan Heavy's Yichun plant, which was completed in September, has an annual production capacity of 20,000 tons of lithium iron phosphate and 10,000 tons of lithium carbonate. Every day the plant is shut, the facility would lose the equivalent of about 20 tons of lithium carbonate production, according to the company.

KangLongDa’s factory, which started trial production in November, is estimated to lose about 25 tons of output per day during the shutdown.

None of the three companies gave any indication of possible resumption dates.

Editor: Emmi Laine, Xiao Yi