African Potash agrees pricing for fertiliser deal

25th Sep 2015 10:22

(ShareCast News) - AIM-listed exploration company African Potash has reached an agreement on a sale price of $500 per metric tonne for delivery to an unnamed Zambian distributor.The company struck a deal through Comesa, a free trade union of twenty African coutries, on 24 August to supply 50,000 tonnes of fertiliser per year.African Potash said its pre-tax profit margin on the deal is expected to be 6%.In addition, the company said a trade finance facility of up to $50m is currently being arranged through African Potash's exclusive banking adviser Loita Capital Partners International Limited. It said the facility will remain in place until Potash's fertiliser trading operations become self-funding and further details of the facility will be announced once finalised.Executive chairman Chris Cleverly said: "We are delighted to have concluded negotiations on pricing relating to our first memorandum of understanding, which will see delivery of 50,000 metric tonnes of both NPK and UREA fertilisers in Zambia at a price that supports the growth and development of the African farmer."At 1050 BST, African Potash shares were up 8.7% at 3.0988p.