Agrimin Limited (ASX:AMN) has signed a binding offtake agreement with Sinochem Fertilizer Macao Limited for the annual supply of 150,000 tonnes of sulphate of potash (SOP) produced from the Mackay Potash Project for sale and distribution in China.
Sinochem Fertilizer Macao is a wholly-owned subsidiary of Sinofert Holdings Limited, which is listed on the Hong Kong Stock Exchange (HKEX:00297) and whose controlling shareholder is China National Chemical Corporation Limited, a Chinese state-owned enterprise.
China is the world’s largest SOP market and currently accounts for more than half of all global SOP demand.
Sinofert is the country’s largest crop nutrition company and plays a pivotal role in liaising with global potash suppliers to ensure uninterrupted potash supply.
“Important supply channel”
Agrimin CEO Mark Savich said: “Sinochem Fertilizer Macao is a Tier 1 offtake partner and we welcome this long-term relationship with China’s main importer of potash to create an important supply channel for Agrimin’s SOP into the world’s largest SOP market.
“This large tonnage, long-term supply deal with Sinochem Fertilizer Macao is testament to the quality and scale of the Mackay Potash Project.
“It is also further evidence of the considerable interest in the environmental and organic credentials of Agrimin’s SOP product.
“We are at an advanced stage of negotiations with other major fertiliser companies in different regions and we expect to announce further developments in the near term to underpin project financing.”
Offtake agreement
This agreement represents the largest offtake volume for any Australian SOP project.
Price negotiation for the 10-year term offtake agreement will be quarterly based on the Chinese SOP price index quoted by an international marketing group.
The offtake quantity covers one-third of Agrimin’s planned SOP production of 450,000 tonnes per annum and supports a balanced offtake book.