Is Xinjiang becoming a hot potato for polysilicon producers?
Out of four Xinjiang-based polysilicon manufacturers, East Hope is the third that has announced a new factory outside the region linked to forced labor. On May 11, East Hope Group signed a strategic cooperation agreement with the government of the Ningxia Hui autonomous region in northern China and an investment deal with the municipal government of Shizuishan for a cluster of projects regarding “new photovoltaic materials, new energy and modern agriculture.”
East Hope is aiming for a polysilicon plant with a massive capacity of 400,000 metric tons (MT) in Shizuishan. Even the capacity of the first phase is planned to be as large as 250,000 MT, supported by a silicon metal smelter with a capacity of 200,000 MT.
However, the company did not mention anything about when it would start construction and production. “If it is a determined design plan, it is estimated that it will take about one year from the start of construction to completion,” an expert told Chinese Jiemian News, which wrote the plant could be put into operation by the end of 2022.
But this is pure speculation; at the moment, the project appears rather vague. When East Hope began to build its existing polysilicon plant in Xinjiang in April 2016, it announced a plan to reach a capacity of 100,000 MT in 2019; three months later, the total capacity was corrected to 120,000 MT. In contrast, the actual capacity at the end of 2020 was still 40,000 MT.
Why polysilicon manufacturers are building new factories outside Xinjiang
Before East Hope signed the agreement for the project in Shizuishan, both GCL-Poly and Xinte Energy, which are running polysilicon plants in Xinjiang as well, already announced new factories outside Xinjiang: GCL-Poly in Sichuan and Inner Mongolia, Xinte in Inner Mongolia.
At first sight, it may look like Chinese polysilicon manufacturers are turning their back to the Xinjiang Uyghur autonomous region, which has drawn international criticism because of the widespread use of forced labor.
The real reasons, however, are probably more profane. Once a chemical factory has reached a certain size, it is common practice to set up additional capacity at a different location in order to reduce the vulnerability to any incident, such as the flood that Tongwei’s subsidiary Sichuan Yongxiang experienced in August 2020. Moreover, many local and regional governments in China are vying for industrial companies that provide jobs and generate tax income.
Ningxia belongs to the Chinese regions with very low industrial electricity rates, mainly based on coal-fired power plants. East Hope will certainly receive a special tariff for the project in Shizuishan. The city was already the location of two small polysilicon producers, Guodian Ningxia Solar and Ningxia Sunshine Silicon; both shut down during the industry shakeout in 2012.
May 25, 2021 – At the 2021 Polysilicon Industry Development Forum in Shihezi, Xinjiang in mid-May, Xiaofei Zhao, Deputy General Manager at Xinjiang East Hope New Energy, explained that East Hope would start construction of the 250,000 MT polysilicon project in Ningxia in the second half of this year and put it into operation in 2022.
Zhao also mentioned that East Hope has a polysilicon production capacity of 60,000 MT in Xinjiang now and is currently building another 60,000 MT facility there in order to reach a total capacity of 120,000 MT in 2022. The company is planning to further increase the capacity to 200,000 MT through upgrades in the future.
Moreover, East Hope is in talks with the government about a third production base. In total, the company is aiming for a staggering polysilicon production capacity of one million tons.
- East Hope
- forced labor
- production capacity
- Xinjiang Uygur Autonomous Region
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