Sirius Minerals announces new supply deal in Brazil
Mining firm Sirius Minerals has signed a new supply agreement to send its fertilizer product POLY4 to Brazil and other countries in South America.
The Scarborough-based firm signed the take-or-pay agreement between its wholly owned subsidiary York Potash Ltd, OFD Supply Inc. and Cibrafertil Companhia Brasileira de Fertilizantes (Cibra Group Companies).
POLY4 is the trademark name of Sirius Minerals Plc’s fertilizer product. Made from polyhalite, a naturally occuring evaporite mineral, POLY4 contains four of the six macro-nutrients that are essential to plant growth.
Sirius has also agreed to acquire a 30% equity interest in each of the Cibra Group Companies for a total of 95 million Sirius shares.
Santiago Franco, CEO of Cibra, said: “We are excited to be entering into this long-term partnership with Sirius to deliver POLY4 into Brazil and other key markets of South America.
“The supply agreement provides Cibra with access to a unique multi-nutrient product that will play an important and valuable role in one of the fastest growing fertilizer markets in the world.
“POLY4 will change the shape of the fertilizer market in South America and Cibra will be at the heart of driving the growth and adoption of this innovative sustainable product across the region.”
Chris Fraser, managing director and CEO of Sirius, added: “We are delighted to have signed these supply and investment agreements with a leading player in the South American fertilizer market with a proven track record and ambitious growth plans.
“Cibra is a perfect partner for distributing POLY4 into this key market, where trials have demonstrated how it can significantly enhance farming economics. The Cibra offtake agreement takes us beyond our targeted 7 Mtpa and is a major step forward as we look to complete Stage 2 financing and building our global fertilizer business.”
In addition, Sirius is also receiving a £190m boost from Australia’s richest woman, Gina Reinhart.
The money will be used to help complete Sirius’ potash bounty project near Whitby, where the firm is also building a 23-mile long tunnel to transport fertilizer underground between North Yorkshire and Teesside.
The Australian billionaire is using her Hancock Prospecting company to release the money. In return, Hancock will get a 5% revenue cut on the first 13m tonnes of fertiliser that is sold.
