China’s Ministry of Finance has decided to levy 100% special export tariff upon current tariff on phosphorous products regardless of trade form, location, and exporters, during the period from May 20, 2008 to Dec. 31, 2008.

The earthquake-hit Sichuan province of China is the country’s major site of phosphorous mine and manufacturing site of urea. The force majeure encountered by these sites leads to rising prices of phosphorous in the market.

Sichuan has the fourth largest reserves of phosphorous, after Hubei province, Yunnan province, and Guizhou province. It has 33 phosphorous mines listed in the country’s Mine Reserve Catalogue. It has verified phosphorous reserves of 1.1 billion m.t.,of which industrial reserve accounts for 221.47 million m.t.. Sichuan has four of the top 10 phosphorous mining companies in the country, according to reports in local media China Chemical Industry News. They are Qingping Phosphorous Mine that ranks No. 3, Mianzhu Qingping Group that ranks No. 6, Jinhe Phosphorous Mine that ranks No. 7, and Mianzhu Tianchi Phosphorous Chemical that ranks No. 10.

The phosphorous output of Sichuan reached 5.11 million m.t. in 2007, accounting for 11.3% of the country’s total. The phosphorous mines in Sichuan are distributed in Jinhe-Qingping area and Mabian area. The Jinhe-Qingping area is near Shifang City and Mianzhu City, within 100 kilometers from the epicenter Wenchuan. Here the output of Jinhe, Qingping, and Shifang phosphorous mines accounts for over 95% of the province’s total. Besides the three mines, other major phosphorous mines and producers of Sichuan province are also located in the epicenter.

Qingping Phosphorous Mine is the key chemical mine of the country. It has phosphorous capacity of 1 million m.t./year and calcium superphosphate of 50,000 m.t./year. Jinhe Phosphorous Mine has phosphorous capacity of 800,000 m.t./year and monoammonium phosphate (MAP) of 100,000 m.t./year. It has reserve of 15.5 million m.t./year and is severely hit by the earthquake.

In addition, Sichuan is also a major producer of phosphorous compound fertilizer in the country. The price in market is supposed to rise.

The output of urea in Sichuan accounts for over 7% of the country’s total in 2007. The number rises to over 10% if the output of plants in neighboring Yunan province and Guizhou province that are based on natural gas from Sichuan is added.

During the period from January to March 2008, the output of urea in Sichuan reached 948,000 m.t.. Sichuan Chemical Holding, the largest producer of urea in Sichuan with urea capacity of 25 million m.t./year, told a journalist with China Chemical Industry News that one of its major urea manufacturing facility is located in Qingbaijiang district of Chengdu city, near the epicenter. The company closed the facility after the earthquake and the suspension is expected to last 40-50 days.

Meifeng Chemical Holding, the second largest urea producer in Sichuan province, stopped operation after the earthquake. The company does not have power or natural gas supply upon China Chemical Industry News press time.