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Sirius Minerals inks major supply agreement with state-backed Qatari fertiliser firm

The 10-year deal with Muntajat will increase Sirius's peak sales volumes to 13.8mln tonnes of polyhalite each year from its Woodsmith mine in Yorkshire

Sirius Minerals PLC - Sirius Minerals inks major supply agreement with state-backed Qatari fertiliser firm

Sirius Minerals PLC (LON:SXX) has signed a major supply agreement with Muntajat, a Qatari state-backed fertiliser firm.

The North Yorkshire potash miner said under the ten-year deal it would sell and distribute its POLY4 polyhalite across Africa, Australia, New Zealand and certain Middle Eastern and Asian territories.

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The agreement will commence when Sirius begins commercial operations at its Woodsmith mine, with minimum volumes for each territory to increase to 2mln tonnes per annum (mtpa) in the fifth year and then to 2.1mpta in the eighth year.

Sirius said the deal takes its peak sales volumes to 13.8mpta and peak contracted production in any one year to 12.2mpta, adding that it would be able to terminate the deal if Muntajat failed to distribute 75% of the minimum volume.

Chris Fraser, the managing director of Sirius Minerals, said the agreement provided access to “a number of new markets” and underpinned the “large scale, international market appetite” for POLY4.

Founded in 2012, Muntajat is responsible for selling all of Qatar’s fertiliser products, distributing around 9mln tonnes per year to over 3,000 customers in 135 countries.

The deal expands Qatar’s existing partnership with Sirius, with its state investment authority holding a 3.28% stake in the group.

The news sent shares in Sirius 5.6% higher to 3.6p in mid-afternoon trading on Friday, however, the stock is still well off the 10p it was trading at before the company abandoned a US$5000mln financing effort on 17 September.

Quick facts: Sirius Minerals PLC

Price: 3.424 GBX

LSE:SXX
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Market Cap: £240.34 m
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