Sirius Minerals in agreement upgrade as it prepares for York Potash Project

Sirius Minerals Plc has announced the upgrade of its take or pay supply agreement with its existing Fortune 500 US-based agri-business customer.

The initial agreement, for the supply of polyhalite from the York Potash Project, was announced on January 21. It was for 500,000 tonnes per annum of polyhalite for a five year period, from commencement of production, with a possible renewal for a further five years.

The agreement counterparty also had the option to take up to an additional 500,000 tonnes per annum.

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The revised deal will see the base amount of polyhalite supplied tripled to 1.5 million tonnes per annum. The initial contract term is extended from five years to seven years, with possible extension options for two additional five year periods.

Chris Fraser, managing director and CEO of Sirius, said: “We are delighted with this further show of confidence from our North American partner and look forward to sharing successes together for decades to come.

“Like many in the industry our customers understand the value of polyhalite, its multi-nutrient qualities and the fact it can help farmers get the same or better yields more economically.”

The price to be paid under the agreement has not been disclosed but is still based on a formula linked to the market price of nutrients contained in polyhalite.

The deal represents a multi-billion dollar trade deal between the UK and US.

The counterparty, which will continue to remain confidential at this time, is a major US based Fortune 500 agri-business and would be seen by investors and banks as a premium grade counterparty.

Sirius has now secured 3.1 million tonnes per annum of offtake agreements, with an additional 4.8 million tonnes per annum in other forms of commitments. These agreements will provide further assistance in underpinning future financing requirements.