Building Materials and Electrical Stocks Surge as China Starts Construction of Tibet Mega-Dam

Building materials and electrical equipment stocks jumped on Monday as China began construction on a massive dam in Tibet. Dongfang Electric rose 72%; Huaxin Cement rose 35%; Shanshui Cement rose 10%; West China Cement rose 5%.

Chinese Premier Li Qiang on Saturday announced the launch of a mega dam project on the Tibetan Plateau, in what is expected to be the world’s largest hydroelectric facility.

The massive project, located in the lower reaches of the Yarlung Tsangpo River, has raised concerns about water supply and environmental impact downstream in India and Bangladesh.

Li attended the dam’s groundbreaking ceremony in Nyingchi, a southeastern city in the Tibet autonomous region, state news agency Xinhua reported on Saturday.

The Yarlung Tsangpo becomes the Brahmaputra River as it leaves Tibet and flows south into India’s Arunachal Pradesh and Assam states, and finally into Bangladesh.

Beijing first announced plans for the dam in 2020 under its five-year plan, as part of a broader strategy to exploit the hydropower potential of the Tibetan Plateau. The plan was approved last December.

The project is said to be the largest of its kind in the world, with an estimated annual capacity of 300 billion kilowatt-hours of electricity – three times that of the Three Gorges Dam.

The mega project in Tibet will have five cascade hydropower stations, with a total investment estimated at around 1.2 trillion yuan (US$167 billion), the Xinhua report said.