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Sirius Minerals unveils Chinese fertiliser sales deals

Two ten-year supply deals see the company selling some 2mln tonnes of the POLY4 fertiliser product per year to Chinese customers

POLY4, the polyhalite product that will be made from the the new mine in North Yorkshire
"China is a key market for POLY4," said Chris Fraser

Sirius Minerals PLC (LON:SXX) has inked a new supply deal for the fertiliser that will be produced from the group’s new mine in Yorkshire.

Chinese customers  Eiliseng and YSA have signed up for a long-term supply deal for a total of 2mln tonnes of the POLY4 product per year over a ten-year contract - the former will receive 1.2mln tonnes and the latter takes 800,000 tonnes.

The pricing terms are in line with its other similar agreements, Sirius told investors.

READ: Sirius Minerals tipped for near 50% upside as project financing deal nears

The company highlighted that, based on the minimum supply level in the new agreements, the mine’s aggregate peak contracted take-or-pay sales volumes increased to 5.7mln tonnes from 4.7mln tonnes - attached to today's deal news, Sirius said that a prior Chinese contract for 1mln tonne per year has been terminated, with Eiliseng now taking the rights to those territories in southern China.

"China is a key market for POLY4 and we are very pleased to have signed agreements with new customers who both have established fertilizer distribution networks and expertise relevant to their respective regions,” said Chris Fraser, Sirius managing director.

“We look forward to working with Eiliseng and YSA to establish POLY4 as a long-term sustainable fertiliser for use in both of their important agricultural regions in China."

Sirius noted that China has enforced changes that require environmentally sustainable fertilisation practices, and, it highlighted that POLY4 is a multi-nutrient fertiliser with a low environmental impact.

In Yorkshire, the company is advancing the underground mine development project. A recent deal to utilise existing Redcar port facilities has de-risked the project, meanwhile, work away from the mine continues to move towards securing the Stage 2 project financing.

Quick facts: Sirius Minerals PLC

Price: 3.55 GBX

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