13th Jun 2016 11:14
LONDON (Alliance News) - AIM-listed African Potash Ltd on Monday said it has signed a non-binding memorandum of understanding with the government of Uganda to support the development of a fertiliser industry in Uganda.
The move is designed to help ensure the availability and effective distribution of fertilisers to Ugandan farmers, African Potash said in a statement.
The memorandum has the support of the Common Market for Eastern and Southern Africa, with which African Potash has a trading agreement, according to the statement. African Potash said its announcement regarding the memorandum was in response to press speculation.
"Under the terms of the non-binding MoU, African Potash will endeavour, on a best efforts basis, to source 20,000 metric tonnes of fertilisers internationally and arrange delivery to Kampala, Uganda for purchase by the government of Uganda," African Potash said in a statement.
The company said it will conduct a feasibility study in order to assess the viability for the manufacture of fertilisers in Uganda using local materials.
"Depending on the results of this study, a further agreement for the establishment of a facility for the manufacturing of fertilisers may then be entered into by the two parties," African Potash said.
The memorandum is subject to the signing of definitive legally binding agreements. "In the event the company enters into legally binding definitive agreements in respect of the MOU, a separate announcement will be made. There can be no guarantee that any such definitive agreements will be entered into or that any such fertiliser deliveries will be made," African Potash said.
Shares in African Potash were up 22% at 0.700 pence Monday in London.
By Samuel Agini; [email protected]; @samuelagini
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