25th Sep 2015 06:42
LONDON (Alliance News) - African Potash Ltd on Friday said it has agreed a price for its fertiliser to be sold under one agreement that was sourced through the memorandum of understanding with the Common Market for Eastern and Southern Africa (COMESA) and the Mask Africa Crowd Farm Fund Ltd.
Last month, the company signed an agreement with COMESA to create a production and distribution platform for fertiliser in Eastern and Southern Africa to provide 500,000 metric tonnes of fertiliser per year. Since then, African Potash has secured deals to supply 250,000 metric tonnes of fertiliser per year.
On Friday, African Potash said it has agreed to sell the fertiliser covered by a COMESA-sourced deal struck on August 24 with an unnamed Zambian supply company for USD500 per metric tonne. Under that deal, the company will provide 50,000 tonnes of fertiliser per year.
African Potash said it will make a 6% pretax profit margin on its fertiliser under the agreed price.
The company is continuing to agree a price for its other deals whereby it will supply a further 200,000 metric tonnes of fertiliser per year, whilst sourcing new deals to supply the additional 250,000 metric tonnes per year to hit its 500,000 metric tonne target.
In addition, African Potash said it has secured a USD50.0 million finance facility, which will remain in place until the company's fertiliser trading operations become self-funding. Further details of the facility will be announced once finalised, it said.
By Joshua Warner; [email protected]; @JoshAlliance
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