(Yicai) July 29 -- Shares in Sanxiang Advanced Materials climbed as much as 3.9 percent today after the Chinese advanced materials maker said that a unit will invest CNY300 million (USD41.8 million) to build a factory that produces key raw materials for the nuclear industry, breaking a long-standing overseas monopoly.

Sanxiang’s share price [SHA:603663] closed up 1.2 percent at CNY29.03 (USD4). Earlier in the day it hit CNY29.80.

The subsidiary will construct an extraction and separation production line next to Sanxiang’s existing zirconium oxychloride production facility in northeastern Liaoning province, Ningde-based Sanxiang said yesterday. Construction is expected to take 15 months.

Once up and running, the new facility will further purify the existing factory’s products and is designed to produce over 11,740 tons of ultra-high-purity zirconium oxychloride, 8,000 tons of nuclear-grade zirconium oxychloride and over 250 tons of hafnium oxychloride a year.

Nuclear-grade zirconium oxychloride is mainly used to produce structural components in nuclear reactors. And the metallic hafnium made from nuclear-grade hafnium oxychloride is a core material for nuclear reactor control rods. While ultra-high-purity zirconium oxychloride is primarily used in high-precision manufacturing and high-end functional materials fields which demand exceptional material purity, such as advanced ceramics and optical materials.

The project will help ease the shortage of locally produced raw materials for China’s nuclear power, semiconductor and high-temperature alloy materials industries, Sanxiang said. Since zirconium and hafnium are structurally very similar, separating the two chemical elements is extremely difficult. The production of these two types of nuclear-grade compounds has historically been dominated by foreign companies.

This investment will leverage Sanxiang’s strengths in resource and production technology in the zirconium industrial chain, it said. By industrializing the zirconium-hafnium separation process, this will raise the added value of the company’s products and boost the firm’s core competitiveness and industry influence.

Sanxiang’s revenue from its zirconium compound materials business reached CNY876 million (USD122 million) last year, accounting for approximately 84 percent of its total annual income, according to its 2024 annual report.

Editor: Kim Taylor