Yuntianhua’s subsidiary will invest USD 1.13 billion in a major phosphate mine to secure LFP battery materials supply growth.
Yunnan Yuntianhua Co., Ltd.'s investee subsidiary, Yunnan Yuntianhua Julin New Materials Co., Ltd. (Juxin New Materials), is set to undertake a massive investment of approximately 8.169 billion yuan (approximately USD 1.13 billion) in the Wanchang phosphate mine mining project. This strategic move aims to establish a significant upstream resource base with an annual mining capacity of 10 million tons of phosphate ore in Zhenxiong County, Yunnan Province. The project, which involves underground mining and supporting auxiliary facilities, is intended to bolster the development of a green, low-carbon circular economy industrial cluster focused on phosphorus-based new materials.
Yuntianhua holds a 35% equity stake in Juxin New Materials, committing a subscribed capital contribution of 700 million yuan, with 455 million yuan already paid. The mining rights for the Wanchang Phosphate Mine were successfully secured in December 2025, valid for 15 years until December 2040. With preliminary studies and approvals complete, construction is slated to officially begin in December 2026, with a projected five-year infrastructure development cycle. The project boasts considerable profit potential, with an estimated after-tax financial internal rate of return of 12.81%. Upon the completion of the entire industrial chain by 2030, it is expected to generate an annual output value of 60 billion CNY and tax revenues exceeding 8 billion CNY.
This substantial investment is primarily driven by the surging global demand for lithium iron phosphate (LFP) batteries, which are increasingly favored in electric vehicles (EVs) and energy storage systems due to their cost-effectiveness, longer cycle life, and enhanced thermal stability compared to traditional nickel-based cathodes. The automotive sector's demand for purified phosphoric acid (PPA), a critical raw material for LFP batteries, is projected to increase significantly, from about 5% of total PPA demand currently to 24% by 2030. China currently holds a dominant position in refining phosphate rock into PPA, making secure domestic raw material sourcing strategically important.
The project's impacts are multifaceted, encompassing economic and industry-specific transformations. Economically, the 8.169 billion yuan investment represents a significant capital outlay and is expected to yield substantial financial returns, including increased capital expenditures for Yuntianhua. From an industry perspective, this initiative will profoundly strengthen Yuntianhua's upstream phosphate resource base and solidify its leading position within China's phosphate chemical industry. It is a crucial step towards establishing a comprehensive industrial chain that will, by 2030, integrate phosphoric acid, lithium iron phosphate, and other advanced phosphorus-based materials. This expansion will help address potential bottlenecks in the phosphate supply chain, ensuring a stable and secure supply of essential raw materials for the burgeoning LFP battery market, which is vital for the continued growth of the EV and renewable energy sectors.
