Sirius Minerals Plc, through its subsidiary York Potash Ltd, has sealed an exclusive ten-year supply and distribution agreement with Muntajat – Qatar Chemical and Petrochemical Marketing and Distribution Company Q.P.J.S.C. – for the sale and distribution of volumes of POLY4 into Africa (except Nigeria and Egypt), Australia, New Zealand and certain other Middle-Eastern and Asian territories. The deal provides for the exclusive distribution of POLY4 for a 10-year term that commences from commercial operations and includes a five-year extension option.
The company may terminate Muntajat’s distribution rights under the Agreement in relation to a specific territory, if Muntajat fails to distribute 75% of the contracted minimum volumes for such territory over a three-year rolling period. In addition to customary termination rights for both parties, Muntajat has the right to terminate the Agreement in the event that Sirius does not meet certain financing or operational milestones. The pricing mechanism in the Agreement is linked to downstream pricing received by Muntajat on the sale of POLY4 and incentivizes Muntajat to optimize the best FOB netback price for Sirius. Sirius expects the deal to deliver pricing in line with its average price expectations across the current supply agreement portfolio.
“We are delighted to expand our growing partnership with Qatar through this long-term supply agreement with Muntajat,” said Chris Fraser, Managing Director and CEO of Sirius. “This new supply agreement with Muntajat provides us with access to a number of new markets for POLY4 and further underpins the large scale, international market appetite for POLY4, lifting our aggregate peak sales volumes to 13.8 million tpy.” Abdulrahman Ali Al-Abdulla, CEO of Muntajat, added that “we see tremendous potential in POLY4 and Sirius’ Project which will enable us to bring this multi-nutrient product to our extensive global customer network. The addition of POLY4 will complement our existing portfolio and will enable us to provide a more complete solution to our customers in these important markets by adding additional macro-nutrients to our portfolio.”