Phosphate Targeted for Growth in China

Over the next two decades there will be significant trade and development opportunities in China for mining, engineering, equipment, and construction companies interested in becoming part of the development of China's chemical and fertilizer industries. At last count, China's phosphate ore reserves of 11.8 Gt (13 billion st), ranked fourth in the world behind the US, the USSR, and Sahara-Morocco. However, a recent statement by the head of the Ministry of Geology and Minerals, Sun Daguang, claims that with increased prospecting in the last few years, China's phosphate reserves now rank first in the world. Whatever the actual size of its known and potential reserves, China's present phosphate processing capabilities fall far short of demand, while the substantial progress that has been made in this area points out the severity of the problems that still remain. Since 1949 China has developed 181 mines and increased its phosphate concentrate production from 10 kt (11,000 st) to 10.86 Mt (11.97 million st). By the 1980s, China was the third largest chemical fertilizer producer in the world-although this claim is slightly misleading as China's nitrogen/phosphate potassium ratios are far from average world ratios and even further from US standards. According to the Sixth Five Year Plan promulgated in 1982, the country's development plans emphasize the expansion and upgrading of key energy and industrial sectors, including that of fertilizer production-specifically phosphate and potash. Within the framework of the plan, the Ministry of Chemical Industry's development priorities are to: • Increase potash production by 150% to 50 kt (55,115 st). • Raise phosphate fertilizer production 21.2% to 2.8 Mt (3.1 million st), 46 kt (50,705 st) of which will come from new projects constructed and completed within the Sixth Five Year Plan, with projected new production of phosphate concentrate and complex fertilizer in the next decades totaling 500 kt (551,146 st). • Commence work to increase phosphate ore production by 8.33 Mt (9.18 million st). Facilities for 2.43 Mt (2.68 million st) will be completed and come on stream by 1985. • Commence work to increase iron pyrite ore production by 3.69 Mt (4.07 million st), facilities for 2.9 Mt (3.2 million st) will be completed and come on stream by 1985. • Verify 600 Mt (661 million st) of new phosphate ore reserves. Since the promulgation of the Sixth Five Year Plan, Chinese authorities have announced that 70 key construction projects will receive top priority in the implementation of the plan. These projects include five in the chemical industry area, including the construction of four fertilizer plants in Urumqi (Xinjiang), Zhenhai (Zhejiang), Beijing, and Lucheng (Shanxi), and a pyrite mine in Yunfu (Guangdong). In addition, by 1985 the state will expand or construct three major phosphate mines: Wangji in Hubei, Kaiyang in Guizhou, and Kunyang in Yunnan. Fertilizer Ratios In 1982, China's fertilizer production was slightly higher than 12 Mt (13.2 million st) and consisted of 80% nitrogen, 19% phosphate, and 0.19% potassium. By 1985, state officials project that fertilizer production will reach 13.4 Mt (14.8 million st) and consist of 78.4% nitrogen (10.5 Mt or 11.6 million st), 21.2% phosphate (2.8 Mt or 3 million st), and 0.39% potassium (52.3 kt or 57,605 st). To attain the world average using the country's 1985 projected production level for nitrogen, China will have to double its 1985 phosphate production to 5.76 Mt (6.35 million st) and increase its 1985 potassium production almost 80 times to 4.1 Mt (4.5 million st). These numbers demonstrate the seriousness of the fertilizer production problem in China today and the long-term nature of the problem's solution. Development Examples Yunnan is the third largest phosphate-rich province in China with verified deposits of 1.9 Gt (2.1 billion st). Despite this abundance, the province only mines around 3 Mt (3.3 million st) of phosphate rock annually. In June of this year, Yunnan announced its intention to initiate 39 development projects within the next two and a half years, requiring an estimated $200 million worth of foreign investment. The three areas receiving the most emphasis will be: