Sirius Minerals Plc (LON:SXX) has today penned a take-or-pay potash supply agreement with Brazil’s Cibrafertil Companhia Brasileira de Fertilizantes, or Cibra, for supply and resale of POLY4 in Brazil and certain South American countries.
The deal sees the firm’s contracted peak take-or-pay sales volume to 8.2mln tonnes, with an additional exchange being done for a 30% stake in Cibra, in exchange for 95 million Sirius shares. At the same time as agreeing these deals, the London-listed company are also building a potash project in Yorkshire.
“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,” said Chris Fraser, Sirius Minerals chief executive.
Cibra chief executive Santiago Franco, meanwhile, added, “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.”
“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.”
Sirius Minerals shares are currently trading up 1.84p or 6.68% at 29.38p. Analysts from Liberum Capital have reiterated their ‘Buy’ stance on the company’s stock.