ATOME PLC (AIM:ATOM) told investors it has signed a heads of terms agreement with Yara International, envisaging the long-term sale of all fertiliser produced at ATOME’s Villeta project in Paraguay.
The agreement covers the entire production of 264,000 tonnes per annum, marking a key milestone towards achieving full financing.
It comes ahead of a final investment decision (FID) for the project, expected later this year, and the projected start of construction.
This timeline would see Villeta begin operation in 2027.
"The entry into this strategic relationship with global crop nutrition leader Yara is a significant milestone for ATOME on the path to realise our flagship Villeta Project which will be one of the largest renewable fertiliser production facilities in the Western Hemisphere,” chief executive Olivier Mussat said in a statement.
“Proving significant off-taker interest for our renewable product gives a clear path to the finalisation of funding, FID and the commencement of work onsite at Villeta.
“Importantly, it provides the confidence for ATOME to now accelerate the development of its project pipeline, including the 300MW Yguazu project in Paraguay and the 120MW Costa Rica projects.”
Yara, a global crop nutrition company with annual revenues of over $15 billion, will use its extensive sales, marketing, and distribution network that spans more than 60 countries to ‘maximize the market potential and premium value’ of the Villeta plant’s renewable fertiliser.
“Decarbonizing the food systems is at the forefront of our strategy,” said Chrystel Monthean, Yara’s EVP for the Americas region.
“Many of the food companies active in South America have committed to decarbonization targets and our collaboration with them reveals that the decarbonization of the production of fertilisers combined with the use of agronomical best practices can significantly reduce the crops' carbon footprint.”
She added: “The fertilisers from Villeta will become part of a new portfolio called Yara Climate Choice, including fertilisers based upon renewable energy and carbon, capture and storage.
“The project's in-land location could open logistical advantages for some of our growing markets in Mercosur.
“We are looking forward to developing a strategic long term relationship with ATOME."