African Potash signs three-year deal with Comesa
JOHANNESBURG (miningweekly.com) – To create a vertical platform for the mining, production and distribution of fertiliser in the Common Market for Eastern and Southern Africa (Comesa) region, Aim-listed African Potash and Mask Africa Crowd Farm Fund (MACFF) have entered into a three-year trading agreement with Comesa.
Under the terms of the agreement, the exploration company and MACFF would supply and deliver at least 500 000 t/y of fertiliser to offtakers identified and introduced by Comesa.
“Given the growing need for development of a large-scale agricultural industry within Africa to feed the African population and the importance that fertilisers will inevitably hold in this development being successful, we believe that our strategy to develop a vertically integrated business with operations at all levels of the fertiliser chain will prove to be attractive to, and provide significant value and benefits for all stakeholders, investors and end-users alike,” African Potash chairperson Chris Cleverly said.
Comesa would receive a commission fee of 5% to 7.5% on sales, while using its best endeavours to assist on any government-related issues in Comesa member States assisting and supporting implementation.
Diammonium phosphate fertiliser presently traded at $470/t, while urea traded at $290/t. Based on these prices, African Potash expected to generate net revenues of 5% to 15% per tonne for each transaction.
This was the first agreement of this nature entered into by Comesa, which represented a significant milestone in the African fertiliser industry and provided the company with first-mover advantage.
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