Mineral distribution deal agreed ahead of revised potash mine bid

Sirius Minerals Plc has announced the binding take or pay offtake agreement for the evaporate mineral from the York Potash Project, which is set to be the subject of a revised planning application next month.

It did not name the company involved in the agreement but did say that it was a “well-established market leading” Central American based fertilizer distributor that also has operations in Colombia.

The agreement is based on the supply of 150,000 tonnes of polyhalite per annum in the first year of the agreement, rising on an annual stepped basis to 250,000 tpa in the fifth year of production. The five-year deal can be extended by mutual agreement for a further five years.

The fertilizer distributor has also been given the option to increase the minimum amount of the contract by an additional 250,000 tpa.

Sirius said the price paid for the mineral will be based on a formula linked to the market price of nutrients contained in polyhalite and is in line with previous market guidance.

The fertilizer distributor will use the material in Guatemala, Belize, El Salvador, Nicaragua, Honduras, Costa Rica, Panama and Colombia.

Chris Fraser, managing director and chief executive officer of Sirius, said: “This agreement continues to extend the global sales reach of polyhalite and means we are now partnered with an organisation that controls a substantial proportion of the Central American crop input market.

“Our customer commitments now exceed five million tonnes per annum, with additional options for 750,000 tonnes per annum. We are having a number of ongoing discussions with customers seeking to tie down supply agreements for this important multi-nutrient mineral.”