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Sirius signs two new Chinese take-or-pay agreements

Sirius Minerals (LSE:SXX) has signed new 10-year take-or-pay supply agreements with two new Chinese customers for an average combined 2 million tonnes per annum of its multi-nutrient fertiliser POLY4 product from its Woodsmith polyhalite mine in North Yorkshire.
Sirius signs two new Chinese take-or-pay agreements Sirius signs two new Chinese take-or-pay agreements Sirius signs two new Chinese take-or-pay agreements Sirius signs two new Chinese take-or-pay agreements Sirius signs two new Chinese take-or-pay agreements

Sirius has signed two more supply agreements for POLY4 product from its Woodsmith mine

Staff reporter

The deal was signed with Guangzhou Eiliseng Biotech in southern China for an average 1.2Mtpa and Yantai Service Agricultural Science and Technology in northern China for 800,00tpa and will run from first production, with pricing linked to the relevant product benchmarks.

Sirius managing director Chris Fraser said the new customers had established fertiliser distribution networks and expertise.

The Eiliseng contract will replace Sirius' agreement with Yunnan Dian Huang Peony Industrial Group, which has terminated its existing agreement for 1Mtpa of POLY4, with Eiliseng taking over supply into Yunnan and Sichuan.

Sirius noted tests had shown POLY4 had a low environmental impact while delivering greater nutrient uptake and improved yield and quality.

This made it relevant under the Chinese government's changes to agricultural practices and planned farm consolidation to restore soil efficiency through more balanced and environmentally sustainable fertilisers.

The new contracts add onto multiple other deals in Asia and take the company's aggregate peak contracted take-or-pay sales volumes to 5.7Mtpa.

A month ago, Sirius signed a seven-year offtake agreement with Dubai-based ITL Trading for POLY4 to supply into Nigeria and West Africa.

Sirius' shares were trading at 33.78p (US43.92c), up 1.25% from the previous close.