Yuntianhua backs giant new phosphate mine in Yunnan

10 Mt/y Wanchang mine approved

Yunnan Yuntianhua said Julin New Materials plans to build a 10 million tonne per year underground mine at the Wanchang phosphate deposit in Zhenxiong county, Yunnan. The total investment is estimated at CNY 8.16 billion ($1.13 billion), including CNY 980.9 million ($135 million) already paid for exploration and mining rights and around CNY 7.06 billion ($978 million) of new capex and working capital, with final spend to depend on actual costs.

Yuntianhua has committed equity in line with its 35% stake, with CNY 700 million ($97 million) subscribed and CNY 455 million ($63 million) paid in so far. The board signed off the project on 14 May 2026; it does not require a shareholder vote and is neither a related‑party transaction nor a major asset restructuring, but still needs approval from the relevant state‑owned assets authority.

Large resource base and five‑year build

Julin New Materials obtained the Wanchang mining licence in December 2025, covering 23.1564 square kilometres and permitting underground extraction of phosphate ore and fluorspar between 1,836.8m and 450m elevation until December 2040. As of February 2025, in‑pit resources total 2.438 billion tonnes at an average phosphate grade of 22.54%, giving what Yuntianhua calls a solid platform for large‑scale, intensive development.

The project comprises a 10 million tonne per year underground mine plus power and water supply, transport links, offices, accommodation and common facilities. Civil works are planned over five years, with construction slated to start in December 2026 and a post‑tax internal rate of return estimated at 12.81%, subject to execution and market conditions.

Feeding fertiliser and new‑energy chains

Yuntianhua sees Wanchang as the resource backbone for a phosphate‑based new materials cluster in Zhenxiong, in line with China’s push for more efficient and higher‑value use of phosphate. It says demand is shifting from a single “agricultural fertiliser” engine to a dual “agriculture + new energy” model, with fertiliser needs remaining large and rigid while battery and other new‑energy applications grow quickly.

Rock from Wanchang is earmarked for future plants producing high‑grade concentrates, purified phosphoric acid, iron phosphate and lithium iron phosphate (LFP) battery materials, as well as yellow phosphorus, high‑purity phosphoric acid, phosphorus‑based flame retardants, water‑soluble fertilisers and controlled‑release fertilisers. Those downstream projects are still under planning and feasibility review, and Yuntianhua cautions that they may not all proceed and that products will face sector competition and price pressure.

Strategic consolidation path

Julin New Materials was set up in 2023 by Yuntianhua Group, Yunnan Yuntianhua, Zhaotong Development Group and a Zhenxiong investment vehicle to acquire Wanchang and build a phosphate‑based new materials industry. Yuntianhua Group owns 55%, Yunnan Yuntianhua 35%, Zhaotong Development Group 9% and Zhenxiong Chanyi Investment 1%. Because Wanchang overlaps with Yuntianhua’s own phosphate mining business, Yuntianhua Group has pledged that, within three years of obtaining the mining licence and subject to policy and minority protection, it will transfer control of Julin New Materials to the listed company.

Yuntianhua says the mine will materially strengthen its long‑term phosphate security once Julin New Materials is consolidated and will support its “14th Five‑Year” strategy to extend from fertiliser into higher‑value new‑energy and specialty phosphate products. It does not expect a major near‑term impact on earnings or existing core operations, but says that after consolidation Wanchang will be a key capex focus for some years.

Key risks

The company notes that Wanchang is still in the preparation phase, with a long construction period, large funding needs and deep underground mining in complex geology, and warns that timing, costs and returns could differ from current plans.