Sirius sees US client triple order

Sirius announced the upgrade of an agreement with its existing Fortune 500 US-based agri-business customer.

The mine – known as the York Potash Project – was given the go-ahead at a special planning meeting in Whitby in June and the Government has ruled out holding a public inquiry into the proposals. According to Sirius, the mine will directly employ 1,070 people, and also support 1,000 jobs indirectly.

The initial agreement with the un-named US business, 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 the start of production, with a possible renewal for a further five years. The un-named “counterparty” also had the option to take up to an additional 500,000 tonnes per annum.

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

Chris Fraser, the 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.

A Sirius Minerals spokesman said: “On current prices and over a full 17-year period, it 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.”

Last month, Gareth Edmunds, Sirius Minerals’ external affairs director, said the company hoped to have completed the definitive feasibility study into the proposed mine by the autumn.

Speaking in July, Mr Edmunds told The Yorkshire Post: “There is still quite a bit of work to do before we get on the site.”

Figures released by Sirius show that, in February this year, 5,518 of the company’s shareholders were from Yorkshire and the Humber, which is around 20 per cent of the overall total.

Mr Edmunds said he was pleased that such a large number of Yorkshire-based investors had supported Sirius.

He added: “There’s a huge amount of s upport. We have always acknowledged that and we are very grateful. They share in our success.”

Paul Smith, an analyst at WH Ireland, said last month: “When commissioned Sirius could be in production for more than 100 years.”