With increasing consumption of phosphate rock and acceleration of global phosphate production, the shortage of phosphate resources is increasing with the development and utilization of phosphate. China's Ministry of Land and Resources has classified phosphate as a mineral that cannot meet China's growing demand for phosphate rock in 2010. The phosphorus chemical industry is one of the important economic pillars for Yunnan province. Yellow phosphorus production in enterprises has led to a significant increase in the amount of phosphorus sludge. This paper focuses on phosphine generation in the process of phosphoric sludge utilization, where the flame retardant tetrakis (hydroxymethyl) phosphonium chloride (THPC) is synthesized by high concentrations of phosphine. The optimum conditions are determined at a space velocity of 150 h−1, a reaction temperature of 60 °C, 0.75 g of catalyst, and a ratio of raw materials of 4:1. Because of the catalytic oxidation of copper chloride (CuCl2), the synthesis of THPC was accelerated significantly. In conclusion, THPC can be efficiently synthesized under optimal conditions and with CuCl2 as a catalyst.