Sirius Minerals secures polyhalite offtake contract

27th Jun 2013 08:40

AIM-listed global potash exploration and mining company Sirius Minerals has entered into an offtake agreement with Yunnan TCT Yong-Zhe company TCT) for the sale of 1.0m tonnes per annum (mtpa) of polyhalite for 10 years from 2017. The company said that the offtake would be for a fixed price per tonne for the first three years with a re-negotiation of pricing from year four onwards. It said that the agreement contained several conditions including collaboration on testing and results from crop trials of polyhalite in Yunnan and also Chinese government approvals.TCT is a domestic agricultural products company in China, integrating production and distribution of agricultural products along with import and export trade and agrochemical services. Privately owned, TCT's head office is in Kunming in the Yunnan Province and also operates in multiple other provinces around the country.Chris Fraser, Managing Director and Chief Executive Officer of Sirius, said: "This is a major milestone for the company that further demonstrates the market for polyhalite, supports the economics behind the project and will ultimately help to give confidence in the financing for construction." He added: "The offtake agreement is the latest endorsement of the global demand for polyhalite, its unique multi-nutrient qualities and the role that balanced fertilisation can play in the largest fertiliser market in the world."Yu Yan Qing, Chief Excutive Officer of TCT, said: "We see great potential in polyhalite as an organic multi-nutrient fertiliser that can provide a competitive advance in agricultural efficiency and helping to increase crop yields and quality in China. This is an important step for a long term and prosperous relationship between TCT and Sirius Minerals."Sirius Minerals' share price was up 5.77% to 27.50p at 09:12 on Thursday.MF