VANCOUVER (miningweekly.com) – Near-term crop nutrient producer Potash Ridge's Quebec-based subsidiary Valleyfield Fertilizer Corp has signed a preliminary nonbinding, multiyear agreement with a prominent fertiliser distribution partner, representing about 25% of Valleyfield's initial yearly potassium sulphate (SOP) output.
The Toronto-based Potash Ridge said a portion of the distribution volume falls under a take-or-pay formula, which together with several other commercial contracts in place, positions the company to pursue project financing negotiations.
Potash Ridge aims to become the first Mannheim SOP producer in North America. The Mannheim Process method for producing SOP accounts for about 50% to 60% of global output, despite being the most expensive method of producing SOP, owing to energy requirements and the high cost of buying muriate of potash and sulphuric acid.
The company expects to finalise definitive binding terms of the contract in the coming weeks.
The agreement contemplates offtake of up to 10 000 t/y of SOP, representing a significant milestone for the company.
"The distribution agreement secures a meaningful volume of our production with an established industry partner who possesses significant knowledge and experience of the SOP market in Eastern North America, our primary target market,” Valleyfield president Jay Hussey said in a news release.