19 June 2013 23:18 [Source: ICIS news]
HOUSTON (ICIS)--Pacific Potash Corporation announced Wednesday it has signed a nonbinding memorandum to sell potash from its anticipated Brazilian fertilizer facility to CapitalAsia Investment Holdings Group.
The agreement calls for both parties to enter into a formal off-take agreement if, and when the Amazonas Potash Property is developed into a mine and that CapitalAsia Group, or a purchaser designated by it will buy up to 1 million tonnes of potash per year at the future world market price for potash. The off-take agreement will be for the lesser of 20 years or the life of the mine.
“This Memorandum of Understanding confirms we have a ready market for any future potash sales from our Amazonas Potash Project in Brazil, and strengthens the ties between our company and CapitalAsia Group. Both parties believe in the future desirability of developing domestic sources of fertilizer products for the growing Brazilian market as well as, the potential to export a percentage of production to China,” said Balbir Johal, executive co-chairman and director of Pacific Potash.
Johal said the potential project would help ease Brazil’s booming agricultural industry’s reliance on imports of the crop nutrient. He said in 2012 Brazil imported 7.5 million tonnes which accounts for 93% of Brazilian consumption. Johal added that Wednesday’s agreement shows the commitment to develop the Amazonas Potash Property as quickly as possible.
“China ranks first in the global grain production with the largest population in the world. The improving living standards in the next decades will lead to a higher demand for grain production. The demand for potash will increase dramatically with potash being the basic raw material in agriculture,” said CapitalAsia Group.
“This agreement of 1 million tonnes will provide important guarantee for the huge future demand. It also represents a long-term, mutually beneficial strategic partnership between CapitalAsia and Pacific Potash. We are looking forward to working with Pacific Potash to bring the Amazon Potash Project through the various stages of exploration and development.”CapitalAsia Group is a global investment firm active in Asia and North America with headquarters in China as well as US and Canada operations. In addition to the Amazonas Potash project, Vancouver, Canada-based Pacific Potash is currently exploring surrounding potash claims in Brazil.
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