JOHANNESBURG (miningweekly.com) – ASX-listed potash developer Highfield Resources has signed its first memorandums of understanding (MoUs) with three large European fertiliser companies for up to 320 000 t/y of K60 muriate of potash (MoP) in offtake from the company’s Muga mine, in Spain’s Navarra province.
Highfield MD Anthony Hall noted that the company had deliberately focused on major consumers in Spain and southern France and that the nonbinding MoUs were for the supply of MoP to customers within the southern European fertiliser market, close to Muga.
“These MoUs reinforce the belief shared by ourselves and other market observers that the Muga potash mine will make Highfield the highest-margin global producer,” he said, further highlighting the MoUs as a positive development and “derisking milestone” for Highfield.
Hall added that, with the current European potash price premium and Highfield’s ability to truck directly to consumer depots on a just-in-time basis, the company expected to receive a substantial premium over first-on-board Vancouver prices.
In addition, Highfield was hosting ongoing discussions with additional parties in the European and North African market, including wholesale customers, as well as potential global trading partners, for remaining production from the Muga mine.
The company noted that European mine closures and expansions were expected to remove a net 1-million tonnes of MoP production from these markets by 2020.
Meanwhile, Highveld noted that the MoUs provided a framework for further negotiation of long-term contracts for the supply of MoP to a variety of blending parties, the closest of which was less than 100 km from Muga.