Under the terms of the agreement, Kisan – a wholly owned subsidiary of the Indian Farmers Fertilizer Cooperative Ltd – has agreed that it will not purchase less than 50% of the phosphate rock produced from APPSA’s Bayovar Concessions, up to a total of 500 000 tpy. The agreement has an initial term of 15 years starting as soon as APPSA establishes commercial production of phosphate rock from the Bayovar Concessions for not less than 30 consecutive days. GrowMax claims that the price of the phosphate rock will be based on prevailing phosphate rock prices in Peru or South America as a whole at the time of sale. The agreement also contains a number of other customary offtake agreement terms and conditions.
The President and CEO of GrowMax, Stephen Keith, said: “We are extremely pleased to have signed an offtake agreement with an exceptional and highly-reputed partner such as Kisan/IFFCO. This agreement provides GrowMax with the benefit of an ongoing future revenue stream and lower market risk once production of phosphate rock commences and also provides Kisan with a secure future supply of phosphate rock. This agreement marks an important step in the company’s strategy to optimise its existing projects and assets and is consistent with our recently-announced objective to become a cash-generating fertilizer business.”