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Sirius extends partnership with ADM in North America

UK-based Sirius Minerals (LSE:SXX) has signed an agreement with US-based agri-business Archer Daniels Midland Company (ADM) for the supply of starch-based binding agent for its POLY4 product.
Sirius extends partnership with ADM in North America Sirius extends partnership with ADM in North America Sirius extends partnership with ADM in North America Sirius extends partnership with ADM in North America Sirius extends partnership with ADM in North America

Sirius has had a busy year signing agreements for its POLY4 product from the Woodside mine

Staff reporter

According to the agreement, ADM will supply Sirius with binder for an initial five-year period from the start of production from the Woodsmith polyhalite mine in Yorkshire, with renewal options.

The two companies also agreed Sirius would design and construct a binder handling facility with the support and expertise of ADM near its materials handing facility in Teesside, while ADM would continue its existing research and development programme on the most efficient and effective binders for POLY4 for a further period of three years.

This is not the first time the two companies have worked together, with Sirius also confirming ADM as its North American POLY4 offtake partner.

The two companies entered into an offtake agreement in 2014, which was expanded the following year for seven years from commercial production, with two five-year extension options to supply up to 1.5 million tonnes per annum of POLY4 in the fifth year and an option for an additional 500,000tpa.

Sirius CEO and managing director Chris Fraser said the new agreements strengthened the relationship between the two company by "securing ADM as an important supplier and as a customer aligning our interests for the long-term and demonstrating the significant role POLY4 will play in the world fertiliser markets".

ADM Starches EMEA commercial director Johan Schrijver said the partnership had led to a better understanding of the production of the POLY4 granules and identified operational savings and efficiency gains

"Prior to the start-up of production, joint research and development will continue to further develop the understanding of the opportunities for the end-product for all POLY4 customers around the globe," he said.

Sirius has been busy this year signing offtake and take-or-pay agreements for its POLY4 product across the world.

The company's shares were up 4.18% Tuesday to 37.15p (US48.85c).