African Potash shares up after MoU with Uganda

13th Jun 2016 12:25

(ShareCast News) - Exploration company African Potash confirmed on Monday that, following press speculation, 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 AIM-traded firm, which focuses on the vertical integration of fertiliser operations in Africa and sub-Saharan potash assets, said the agreement will seek to help ensure the availability and effective distribution of fertilisers to Ugandan farmers.It said the MoU is supported by the Common Market for Eastern and Southern Africa (COMESA), with whom African Potash already has a trading agreement."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," the company's board said in a statement."African Potash will also 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 that 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 MoU is subject to the signing of definitive legally binding agreements, in which event it pledged to make a separate announcement."There can be no guarantee that any such definitive agreements will be entered into or that any such fertiliser deliveries will be made," the company's board explained.At 1245 BST, shares in African Potash were up 13.04% at 0.65p.