JOHANNESBURG (miningweekly.com) – Aim-listed African Potash has entered into a memorandum of understanding (MoU) with a Congolese distributor to supply in excess of 150 000 t of fertiliser into the Democratic Republic of Congo.
This marked the fourth fertiliser supply agreement signed since the signing of a landmark trading agreement with the Common Market for Eastern and Southern Africa (Comesa) in August.
Under the agreement, Comesa would receive a commission fee of between 5% and 7.5% from sales made pursuant to the agreement, while assisting on any government-related issues in member States relating to the implementation of the agreement.
Comesa would also assist and support the implementation of the MoU.
At present, diammonium phosphate fertiliser was trading at $470/t, while urea was trading at $273/t. Based on these prices, African Potash expected to generate a net profit of 5% to 15% a ton on each transaction under the MoU.
"No region of the world has been able to expand agricultural growth rates, and thus tackle hunger, without increasing fertiliser use. Despite economic growth rates of 8.9% in 2014, according to World Bank figures, the DRC currently uses only 1 kg of fertiliser per hectare of arable land, whereas India uses 16 kg/ha and the UK 234 kg/ha,” African Potash executive chairperson Chris Cleverly pointed out.