China’s Sanxiang Ventures into Nuclear Material Plant to Break Foreign Hold

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Shares of Sanxiang Advanced Materials surged by as much as 3.9% today following an announcement that a subsidiary of the Chinese company will invest CNY300 million (approximately USD41.8 million) to construct a new factory dedicated to producing essential raw materials for the nuclear industry—marking a significant move to break a longstanding reliance on overseas suppliers.

Sanxiang’s stock [SHA:603663] closed the day up 1.2% at CNY29.03 (around USD4), after reaching a peak of CNY29.80 earlier in the session.

The subsidiary plans to build an extraction and separation production line adjacent to its existing zirconium oxychloride manufacturing plant in northeastern Liaoning province. The project, based in Ningde, is expected to take about 15 months to complete.

Once operational, the new facility aims to enhance the purification of the current products and is projected to produce over 11,740 tons of ultra-high-purity zirconium oxychloride, 8,000 tons of nuclear-grade zirconium oxychloride, and more than 250 tons of hafnium oxychloride annually.

Nuclear-grade zirconium oxychloride is primarily used to manufacture structural components within nuclear reactors. The metal hafnium, derived from nuclear-grade hafnium oxychloride, is a fundamental material for control rods in reactors. Ultra-high-purity zirconium oxychloride is mainly utilized in high-precision manufacturing fields such as advanced ceramics and optical materials, which require exceptional material purity standards.

Sanxiang noted that this project is expected to help alleviate the domestic shortage of raw materials for China’s nuclear power, semiconductor, and high-temperature alloy sectors. Because zirconium and hafnium share similar structures, separating these elements has been highly challenging—historically, foreign firms have dominated the production of these nuclear-grade materials.

The investment aims to capitalize on Sanxiang’s expertise in resource management and production technologies within the zirconium industry, thereby industrializing the zirconium-hafnium separation process. This move is anticipated to add value to their products, strengthening the company’s competitive edge and expanding its influence within the industry.

In 2023, Sanxiang generated CNY876 million (around USD122 million) from its zirconium compound materials division, which represented roughly 84% of its total annual revenue, according to its 2024 annual report.