20th Jul 2018 08:08
LONDON (Alliance News) - Sirius Minerals PLC said Friday it has signed supply agreements for POLY4 fertilizer with two new Chinese customers.
Sirius, which is developing a large polyhalite mine in north Yorkshire, has signed a 10-year take-or-pay supply agreement with each of Guangzhou Eiliseng Biotech Co Ltd and Yantai Service Agricultural Science and Technology Co Ltd for the resale of POLY4 into southern and northern provinces of China.
Pricing terms of both the agreements are consistent with the company's existing agreements, Sirius said.
Taking the minimum volumes under the new Chinese supply agreements into account, the company's aggregate peak contracted take-or-pay sales volumes has increased to 5.7 metric tonnes per annum from 4.7 Mtpa.
The Eiliseng agreement provides for resale of POLY4 into provinces based across the south of China with potential sales volumes up to a maximum of 1.3 Mtpa by the seventh year and provides mechanics to ensure minimum volumes on a take-or-pay basis reaching 1.15 Mtpa in the peak year.
Sirius Minerals said its existing agreement with Yunnan Dian Huang Peony Industrial Group Co Ltd for supply of up to 1 Mtpa of POLY4 into Yunnan and Sichuan provinces has been terminated and Eiliseng now has the rights to resell POLY4 in both the provinces and to service any demand from Dian Huang.
The Yantai agreement provides for resale of POLY4 into certain provinces in the north of China. The agreement provides for a minimum volume commitment on a take-or-pay basis of 800,000 tpa in its peak year with an accelerated ramp-up schedule which has it reaching 800,000 tpa in the sixth year.
Sirius Minerals shares were up 1.2% at 33.76 pence at the London open on Friday.
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