Sirius Minerals signs fertilizer sales agreements in UK, Europe

28 May 2013 12:29  [Source: ICIS news]

LONDON (ICIS)--Sirius Minerals has signed several agreements with fertilizer distributors and manufacturers in the UK and central Europe covering future sales from its planned potash mine in north Yorkshire, in the UK, the global mining company said on Tuesday.

The total volume committed so far to framework sales agreements (FSA) amounts to 310,000 tonnes/year, which includes 60,000 tonnes mainly targeted for sales in the UK.

The FSA set out volume commitments and form a basis for cooperation between the parties, Sirius said.

The company will enter into formal sales contracts closer to the start of production at the mine, Sirius said. The pricing structure will also be determined at that time, it added.

Sirius said the agreements have been signed with established fertilizer manufacturers and distributors but said its customers will remain confidential for now.

These agreements are in addition to a marketing agreement signed by Sirius with trader Keytrade for up to 1.75m tonnes/year of polyhalite, the company said.

The company is also in discussions with other distributors and fertilizer blenders for similar supply agreements. Sirius said discussions are at various stages and should they reach a successful conclusion the total implied demand from these deals, including the tonnes allocated to Keytrade, would exceed the initial production target of 5m tonnes/year from the York potash project.

"Customers both here in the UK and around the world are seeing significant agronomic value in our products and are encouraging us to reach production as fast as possible," said Chris Fraser, managing director and CEO of Sirius.

Earlier this month, tests conducted by the York potash project indicated that the mine can produce more potash than earlier estimated. The mineral resource is now estimated at 2.66bn tonnes at an average grade of 85.7% polyhalite compared with 2.2bn tonnes at 82.4% polyhalite.

The North York Moors National Park holds the world’s largest estimated resource of polyhalite, a mineral compound from which specialty fertilizer sulphate of potash (SOP) can be produced.

Sirius Minerals is however facing several objections from certain environmental groups on the development of the York potash project because of potential impact of the mine on the area.

By: Deepika Thapliyal
+44 208 652 3214

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