Hunan Yuneng New Energy Battery Material Co. announced plans to invest about CNY 24 billion in an integrated battery materials and recycling complex in Weng’an county, China’s Guizhou province.
The Shenzhen-listed cathode material producer said the project will be implemented by a newly established wholly owned subsidiary and developed over an estimated five-year period. It plans to invest between CNY 5 billion and CNY 8 billion during the first 18 months after construction formally begins, with later spending adjusted according to market demand.
The proposed complex will include annual production capacity of 800,000 metric tons of lithium iron phosphate and 1 million metric tons of iron phosphate. It will also extend upstream into phosphate rock mining and processing, pyrite resources, sulfuric acid and lithium carbonate production, while adding lithium-ion battery recycling capacity.
Hunan Yuneng said the project is intended to create an integrated chain covering resources, precursor materials, cathode production and recycling. Locating the facilities near phosphate resources in Guizhou could reduce transport and raw-material procurement costs, improve supply security and lower exposure to price fluctuations in sulfur, phosphoric acid and iron-based inputs.
Hunan Yuneng sold 1.14 million tons of phosphate-based cathode materials in 2025. The company said its shipments have ranked first globally for six consecutive years. Its production capacity reached about 994,500 tons last year, with utilization of more than 110%, indicating that its plants operated above their stated annual design capacity.
High-density products have become increasingly important to the company’s sales mix. Its CN-5 and YN-9 product families recorded sales of 588,500 tons in 2025, accounting for around 51% of total volume.
The company also recently notified customers that it will raise prices for all LFP products by CNY 2,000 per metric ton from Aug. 1, because of higher raw material costs, continued full production and insufficient new capacity to meet all customer order growth. This move suggests the pricing power of Yuneng in qualified high-end material.
Hunan Yuneng is simultaneously terminating a planned 500,000-ton copper smelting project in Fuquan, Guizhou. The company said new policy requirements for equity-owned copper concentrate resources made the project no longer feasible. Most assets already invested in the project may be reused in existing or future operations.
The Weng’an expansion carries significant financial and execution pressures. Its proposed investment is more than three times Hunan Yuneng’s cash balance at the end of March 2026 and will require substantial internal and external financing. The company is also proceeding an H-share listing in Hong Kong, but that process remains subject to regulatory and market uncertainty.
Demand absorption is another concern. Several Chinese cathode producers are announcing large LFP expansions, while changes in battery chemistry, slower electric vehicle growth or delayed storage projects could affect utilization during the project’s five-year construction period. Mining approvals, environmental reviews and local resource guarantees will also influence the timetable.
If completed as planned, the complex would strengthen Hunan Yuneng’s control over raw materials and production costs. Its commercial outcome, however, will depend on disciplined capacity phasing and continued demand for higher-performance LFP products.
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