A glance of phosphate industrial layout of China’s prime glyphosate manufacturers

On August 17, Wynca announced its intention to spend no more than RMB550 million yuan in acquiring the phosphate ore and yellow phosphorus assets from Shen Xin, a natural person. Now in view of the changes of the external circumstances, after careful assessment by the company and a friendly consultation with the other party, Wynca has decided to terminate the negotiation for the initially planned acquisition of phosphate ore and yellow phosphorus assets.
 
As a non-renewable strategic resource, phosphate ore is the starting point of the phosphorus industry chain, due to which enterprises in possession of the phosphorus source appear in a stronger position on the market. As affected by regulatory policies, work safety and environmental compliance requirements, the Chinese phosphate ore production rate has been for long restricted to varying degrees, which leads to continued reduction of production. In the meantime, from the demand side, the market demand for pesticides and fertilizers is stable, whilst the demand for the new energy-oriented iron phosphate lithium battery is increasing.
 
In this context, lots of listed companies have enhanced their presence in the phosphate ore industry, where the competition has become increasingly intensified.
 

Leading glyphosate manufacturers to increasingly secure phosphate rock resource
 

1. Xingfa Group
 
Xingfa Group is a leading enterprise in phosphorus chemical industry in China, that has long been operating in the forefront of the industry in respect of phosphate ore resource reservation and production, being an influential player in the Chinese phosphate ore industry.
 
Up to now, the company possesses mining rights of 429 million tons of phosphate ore reserves. In addition, the company holds 70% equity interest in Jingzhou Jinghua (with 289 million tons of proved phosphate ore reserves), 50% equity interest in Qiaogou Mining (with 188 million tons of proved phosphate ore reserves) and 26% equity interest in Yi’an Industry (with 315 million tons of proved phosphate ore reserves which have been granted mining permit, being currently in the process of engineering and construction) via its controlled subsidiary Yuan’an Jixing. The annual 2-million-ton mining project in Houping Phosphate Mine was granted production permit already in December 2022; the company’s current designed phosphate ore capacity is 5.85 million tons per year.
 
On top of the rich phosphate ore resource, Xingfa Group owns advanced phosphate mining technology. The key technology of thick and gentle dip phosphate ore mining, which is jointly developed by the company and technical research institutes, has successfully solved the worldwide problem of mining of thick and gentle dip phosphate ore under complex geological conditions, which have effectively improved the extraction rate; the two-step post-mining filling mining technology, the bolt anchor net-anchor cable joined roof control technology have eliminated the safety hazard in the mine goaf; the devices such as dense medium beneficiation, color sorting, photoelectric separation and flotation can effectively improve the economic benefit of medium and low grade phosphate ore. Meanwhile, Xingfa Group’s green mine construction initiative is leading the industry in China. Up to date, the mines of the company are all recognized as national green mines.
 
2. Fuhua Tongda
 
Agrochemical is the pillar of Fuhua Group. As a subsidiary of Fuhua Group, Sichuan Leshan Fuhua Tongda Pesticide Technology Co., Ltd (Fuhua Tongda) was established in 2006, specializing in research and development, production, sales, import and export of glyphosate series, intermediates and by-products.
 
At the front end of the industrial chain, Fuhua Group made an investment in establishment of two subsidiaries, Mabian Fuma Phosphating Co., Ltd and Leshan Fuchuan Salt Industry Co., Ltd. Through the two subsidiaries, Fuhua Group has created an integrated circular economy-based industrial chain, which could reserve 80 million tons of phosphate ore and 75 million tons of salt brine ore, forming a production capacity of annual 1-million-ton phosphate ore mining / dressing and annual 1-million-ton salt brine mining/delivery. The abundant salt and phosphorus resources provide abundant raw materials for Fuhua Group’s production of herbicides, which allow for more than 80% of raw materials required for production of glyphosate to be self-sufficient. At the same time, Fuhua Group could basically exploit its reserves in Metal Metric Ton of more than 100,000 tons, which are expected to bring about 200,000 tons of high-grade metallic mineral deposit.
 
In 2022, Fuhua Tongda entered into an agreement with Leshan Municipal Government, whereby Fuhua Tongda will give an input of RMB22 billion yuan to launch a new project covering comprehensive utilization of fluorite ore-associated resources, fluorine-containing electronic special gas, 600,000-ton lithium electrolyte, 100,000-ton lithium iron phosphate anode material, 50,000-ton premium phosphorus-based flame retardant and 20,000-ton glufosinate projects and supporting facilities.
 
3. Hebang Biotech
 
Hebang Biotech has been operating in the fine chemical industry for more than 20 years, being currently the world’s largest PMIDA supplier, accounting for 70% of the global PMIDA market share. It is a major glyphosate manufacturer in China.
 
According to information, Hebang Biotech currently possesses phosphate ore reserves totaling to 90.91 million tons, distributed respectively in Mabian Yanfeng Phosphate Mine and Hanyuan Liujiashan Phosphate Mine. In addition, the company possesses 98 million tons of salt ore reserves. Its 1-million-ton phosphate ore in Mabian Yanfeng Phosphate Mine is currently under construction as planned, where the exploited minerals have begun to be delivered to the market.
 
In October 2022, Hebang Biotech’s annual 500,000-ton PMIDA project, at a spending of RMB16.7 billion yuan, started construction in Guang’an Xinqiao Chemical Park, Sichuan Province. After the project is completed and put into operation, the project will produce 500,000 tons of PMIDA per year, with an annual output value of above RMB20 billion yuan, thus, to become the world’s largest PMIDA production base.
 
4. Jiangshan Agrochemical & Chemicals

Jiangshan Agrochemical & Chemicals is one of the leading Chinese enterprises in production of pesticides including glyphosate, with a production capacity of 70,000 tons of glyphosate technical per year, which include annual 30,000 tons based on glycine process and 40,000 tons based on IDAN process.
 
In October 2022, Jiangshan Agrochemical & Chemicals, the People’s Government of Weng’an County, Guizhou Province and Wengfu Group signed the Letter of Intent on Investment in Phosphorus Chemical Recycling Industrial Chain Project, which aims to establish an integrated phosphorus chemical recycling industrial chain, to be located within the fine chemical park of Weng’an Economic Development Zone, Qiannan Prefecture, Guizhou Province, involving newbuild of the third production base in addition to Nantong and Zhijiang bases. Weng’an is one of the three major phosphate ore bases in Guizhou, with proved phosphate ore reserves of 3.65 billion tons, known as the Asia’s Phosphorus Storehouse. The project makes for Jiangshan’s utilization of the local resource to strength and ensure the supply of raw materials to itself.
 
In December 2022, Jiangshan announced a plan to acquire no less than 67% of the stakes in Uniphos Chemicals, which is of big benefit to the international phosphorus product trading. The acquisition of shares in Uniphos Chemicals will be a further help to Jiangshan’s expansion of phosphorus chemical industry chain.
 

Conclusion

In the context of strong demand for pesticides such as glyphosate, the supply of the upstream phosphate resource is becoming increasingly tight. The prime glyphosate manufacturers in China, such as Xingfa Group, Fuhua Tongda, Hebang Biotech and Jiangshan Agrochemical & Chemicals, have in recent years made aggressive deployment in the upstream phosphate exploitation in manners of independent mining, equity investment or industry cooperation to enhance their industrial chain advantage and the anti-risk capability. These companies have speeded up their process of mine construction and launch of production, which will further enhance their profitability and market position. Although Wynca’s acquisition does not work out as expected, its industrial layout still goes on. In the years ahead, phosphate ore will still remain a scarcity of strategic resource for which enterprises will keep competing against each other.