UK-based Sirius Minerals has inked a ten-year supply and distribution agreement with a European agribusiness group for the polyhalite – a form of potash used in fertilisers – that its Woodsmith mine, in north Yorkshire, will produce.
BayWa Agri Supply & Trade, a wholly owned subsidiary of Munich, Germany-headquartered BayWa, will distribute Sirius’ POLY4 through its Cefetra business, a distributor and trader in Europe active across the agricultural value chain to the farmgate.
"The European fertiliser market is highly advanced and the second largest in the world behind China. We are delighted to be partnering with a leading agribusiness to distribute our POLY4 product into this key market. Our exclusive partnership with BAST will enable us to reach downstream customers through the groups' well-established and extensive logistics network and long-term, trusted relationships with farmers,” commented Sirius MD and CEO Chris Fraser in a statement on Thursday.
The agreement provides for the exclusive distribution of guaranteed minimum tonnes of POLY4 across most of Europe for a ten-year term and includes two five-year extension options.
The guaranteed minimum volumes under the agreement increase to 2.5-million tonnes a year in year five.
The Woodsmith project area is said to contain the largest, highest grade resource of polyhalite to be found anywhere in the world at 2.66-billion tonnes.
The Woodsmith mine is expected to operate at ten-million tons a year by 2024, expanding to 20-million tons a year by 2029.
Construction of the mine started in May 2017.
Last month, Sirius announced that it was considering an alternative financing proposal for the Woodsmith mine to replace the $3-billion senior debt financing that the company had been negotiating with a group of prospective lenders since 2016. The company stated that the alternative proposal potentially offered a more flexible and attractive solution to its Stage 2 financing requirements.