Sirius Minerals Plc (LON:SXX) announced today the signing of a binding take or pay offtake agreement to supply POLY4 to Intercontinental Trade DMCC Dubai.
* 7 year supply agreement for POLY4 with ITL Trading, one of the largest suppliers of fertilizer to Nigeria
* Pricing terms consistent with the Company’s existing agreements
* Company’s aggregate peak contracted sales volume increased to 4.7 Mtpa
ITL Trading is a global trading company with an active presence in Europe, Africa, the Middle East and Asia. It specializes in supplying Nigeria and West African clients with globally sourced products and services that are critical to laying the foundations for a modern economy. ITL Trading has been in business for over 25 years, and is headquartered in Dubai. It is one of the largest suppliers of fertilizer into Nigeria, and through related companies has access to distribution and logistics infrastructure including storage, port concessions and NPK blending facilities.
The supply agreement is a seven-year agreement from first production, for volumes of POLY4 increasing to 350,000 tonnes per annum in year four and provides for exclusive marketing rights into Nigeria. The agreement has a pricing mechanism linked to a relevant product benchmark and is consistent with the Company’s existing portfolio of agreements. Taking the Agreement into consideration, the Company’s peak contracted sales volumes has increased from 4.4 Mtpa to 4.7 Mtpa.
Chris Fraser, Managing Director and CEO of Sirius Minerals Plc, comments: “Africa is a huge potential market for POLY4 and we are very pleased to establish our initial footprint in Nigeria, which is the largest market in West Africa. Nigeria is positioned as the key market for fertilizer growth in the region and we believe ITL Trading will be a fantastic long-term partner for the Company.
“We continue to make good progress on all aspects of our project and are in active discussions with potential customers in other key markets such as Europe, India and Brazil in order to support the stage 2 financing.”
Preetpal Walia, Managing Director of ITL Trading, comments: “The Nigerian fertilizer market is undergoing strong growth and there is tremendous potential for multi-nutrient products which can deliver balanced fertilization. We see POLY4 as being an ideal product to meet this opportunity and are very pleased to be entering into this long-term arrangement.”