UK Sirius Minerals signs offtake deal for York Potash Project

18 August 2014 23:40 Source:ICIS News

HOUSTON (ICIS)--Sirius Minerals has signed a five-year offtake agreement to be supplied from its York Potash Project with an unnamed central American distributor, the UK fertilizer developer announced on Monday.  

The company said the distribution deal is a binding take or pay arrangement and is structured to align with York Potash's schedule and it is based on the supply of 150,000 tonnes in the first 12 months, rising on an annual basis to 250,000 tonnes by the fifth year of production.

β€œThis agreement continues to extend the global sales reach of polyhalite and means we are now partnered with an organisation that controls a substantial proportion of the central American crop input market. Our customer commitments now exceed five million tonnes per annum, with additional options for 750,000 tonnes per annum,” said Chris Fraser, Sirius managing director.

Sirius said the agreement, which will initially run for five years but can be extended for a further five, will allow its new partner to distribute through its various networks of local and regional companies in markets that include Belize, El Salvador, Honduras and Panama and Colombia

The price to be paid is based on a formula linked to the market price of nutrients and is in line with previous market guidance Sirius said.

The York Potash Project, which is located in North Yorkshire, would upon completion be the first new potash mine in the UK in 40 years.

By Mark Milam