Sirius Minerals Plc (LON:SXX) announced today the signing of a binding take or pay offtake agreement (“the Agreement”) to supply POLY4 to PT Chemical Indonesia, which is a wholly owned subsidiary of Wilmar Group (“Wilmar”) for exclusive resale into key South East Asian territories including Indonesia, Malaysia, Vietnam, Thailand, Philippines and Myanmar.
§ Take or pay offtake agreement for sale of POLY4 to Wilmar Group, a leading agribusiness group, for use and resale exclusively in South East Asia
§ Seven-year agreement with volumes ramping up to 750,000 tonnes per annum
§ Pricing mechanism consistent with the Company’s portfolio of existing offtake agreements
Wilmar is listed on the Singapore Stock Exchange and is one of the leading agribusinesses in South East Asia with extensive distribution channels, a mature logistics network in the region and over 250,000 hectares of its own farming operations. South East Asia is one of the fastest growing fertilizer regions in the world, with a population of over 650 million people.
The prices to be paid pursuant to the Agreement are calculated using a formula linked to the market price of certain nutrients contained in POLY4 and is broadly in line with the Company’s existing supply agreements.
The term of the Agreement is for an initial seven years following initial production which may be extended by a further three years by Wilmar. The Agreement has a delivery schedule of up to 750,000 tpa in the seventh year. In addition, Wilmar has an option to increase the minimum volumes of supply up to 1 million tpa.
Chris Fraser, Managing Director and CEO of Sirius Minerals Plc, comments: “We are delighted to be partnering with one of the largest and most established fertilizer buyers and distributors in South East Asia. Wilmar is a partner with the capacity to reach a diverse customer base through well established, trusted relationships. South East Asia is a fast-growing market which provides Sirius with an attractive opportunity to further diversify and grow our current portfolio of customers.”
