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Sirius Minerals seals off-take deal with the Chinese

The take-or-pay offtake agreement with Huaken International will run for seven years from the start of production at the York Potash Mine in North Yorkshire.

fertiliser.jpg
Polyhalite is a four-in-one fertiliser.

Sirius Minerals (LON:SXX) had an early Christmas present for investors in the form of a deal signed with one of China’s major fertiliser importers.

The take-or-pay offtake agreement with Huaken International will run for seven years from the start of production at the York Potash Mine in North Yorkshire.

And it will ‘ramp up’ to 500,000 tonnes of polyhalite, a four-in-one fertiliser. Pricing, while not disclosed, is in line with other similar deals. 

Sirius, which received planning permission for the mine earlier this year, is in the process of completing a definitive feasibility study (DFS) of the project.

The York Potash mine is expected to eventually produce around 20mln tonnes of polyhalite a year when in full production.

The initial capital investment is put at US$3bn, although we will get a better idea of the funds required once the DFS is published early next year.

In August Sirius said it had secured offtake deals totalling 3.1mln tonnes a year, with an additional 4.8mln tonnes per annum “in other forms of commitments”.

Of the tie-up with Huaken, managing director Chris Fraser: "We are delighted to sign this important agreement with our partners in China and we look forward to working very closely with them for the long-term. 

“Polyhalite's multi nutrient qualities have useful soil conditioning properties and it can assist in helping countries like China restore agricultural productivity and maintain food security for future generations."

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