27 June 2013 12:41 [Source: ICIS news]
LONDON (ICIS)--Sirius Minerals Plc has signed a 10-year offtake agreement with China’s Yunnan TCT Yong-Zhe Company Ltd (TCT) for the sale of 1m tonnes/year of polyhalite from its planned potash mine in north Yorkshire in the UK, starting 2017, the company said on Thursday.
Polyhalite is a mineral compound from which specialty fertilizer sulphate of potash (SOP) can be produced.
"This is a major milestone for the company that further demonstrates the market for polyhalite, supports the economics behind the project and will ultimately help to give confidence in the financing for construction,” said Chris Fraser, managing director and CEO of Sirius.
Under the agreement, the price/tonne has been fixed for the first three years, with a renegotiation of pricing from the fourth year onwards.
Sirius did not disclose the price, but said the price is in line with the company's assumptions used for its “base case NPV [net present value] modelling”.
The agreement is subject to certain conditions including collaboration on testing and results from crop trials of polyhalite in Yunnan, and also approvals from the Chinese government, the release said.
TCT is a privately owned domestic agricultural products company based in Yunnan in China, integrating production and distribution of agricultural products along with import and export trade and agrochemical services.
In May, Sirius had signed several agreements totalling 310,000 tonnes/year, with fertilizer distributors and manufacturers in the UK and central Europe covering future sales from its planned mine.
The determination date for the company’s planning application has been extended by around a month to 29 July, following objections raised by two environmental agencies over the development of the mine.
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