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Sirius Mineral signs new Nigeria offtake

UK-based fertiliser producer Sirius Minerals (LSE:SXX) has signed a seven-year offtake agreement with Dubai-based ITL Trading for POLY4 fertiliser product from its Woodsmith polyhalite mine in North Yorkshire.
Sirius Mineral signs new Nigeria offtake Sirius Mineral signs new Nigeria offtake Sirius Mineral signs new Nigeria offtake Sirius Mineral signs new Nigeria offtake Sirius Mineral signs new Nigeria offtake

Sirius has signed another offtake agreement for the Woodsmith mine

Staff reporter

Under the agreement, the large fertiliser supplier to Nigeria and West Africa will have exclusive marketing rights into Nigeria for POLY4 product from first production of the Woodsmith mine by the end of 2021, with volumes increasing to 350,000 tonnes per annum in the fourth year.

The deal's pricing mechanism will be linked to an unspecified relevant product benchmark.

Sirius said the deal was consistent with its existing portfolio of agreements, with the company's peak contracted sales volumes increasing to 4.7Mtpa from 4.4Mtpa.

The company last year signed a seven-year offtake deal with a Wilmar Group subsidiary in Indonesia for 750,000tpa of polyhalite.

Sirius managing director and CEO Chris Fraser said Africa was a huge potential market for the POLY4 product and he was pleased to establish this initial footprint in Nigeria.

"Nigeria is positioned as the key market for fertiliser growth in the region and we believe ITL Trading will be a fantastic long-term partner for the company," he said.

He added good progress had been made on all aspects of the Woodsmith project and the company was in discussions with other potential customers in other key markets, such as Europe, India and Brazil to support the second stage of financing.

Sirius' shares rose 4.33% Wednesday morning to 32.78p (US43.12c).