(Yicai Global) Aug. 26 -- Yonghe Refrigerant’s shares jumped after the Chinese chemicals firm revealed a plan to invest CNY18 billion (USD2.8 billion) in a new large-scale fluorine chemical production base.

After soaring by the exchanged-imposed trading limit of 10 percent earlier today, Yonghe Refrigerant [SHA:605020] closed up 3.8 percent at CNY45.95 (USD7.08). The Shanghai Composite Index fell 1.1 percent.

Yonghe Refrigerant will build an industrial park in Baotu city, in northern China’s Inner Mongolia Autonomous Region, to tap the local raw material supply and improve the integrated layout of its industrial chain, the Quzhou, Zhejiang province-based firm said in a statement late yesterday.

The project will be built in phases, and it is expected to produce 280,000 tons of fluorine-containing chemicals, 911,000 tons of recycled by-products, and 2.8 million tons of supporting chemicals upon full completion, the firm said.

Fluorine chemicals, which are mainly used to make refrigerant products and special engineering plastics, have higher added value than bulk chemicals, but they are more tightly regulated for safety and environmental protection. Some are also essential raw materials for semiconductors.

Inner Mongolia is home to Asia’s largest fluorite mine, and Yonghe Refrigerant owns mines in the region, according to its website.

The company will lead the new project, which will be jointly invested in by upstream and downstream companies in the industrial chain, although it has not reached any deal with potential partners as yet. The partners, schedule, and investment amounts are yet to be determined, it said.

At the end of last year, Yonghe Refrigerant’s total assets were CNY2.4 billion (USD370.1 million), and its cash on hand was just CNY234 million (USD36 million), much less than the project’s estimated total cost. The firm admitted that it faces very high risks, as the financing is significant and the progress and scale of the funds raised may not reach expectations.

Editor: Futura Costaglione