Encanto Potash Corp. has successfully completed the foundation for an evolutionary offtake agreement with the National Federation of Farmers' Procurement, Processing and Retailing Cooperatives of India Ltd (NACOF). The terms of the offtake agreement include a minimum supply of 5 million tpy for a minimum 20 year term, pending final negotiations related to the offtake agreement.
NACOF is a national farming cooperative under the Indian Ministry of Agriculture, Government of India representing farmers in 25 states across India.
The agreement with NACOF now positions Encanto for the transition of the memorandum of understanding between Encanto and MMTC into a Commercial Marketing and Distribution Agreement to provide for the sale of an additional minimum of 2 million tpy of potash, as MMTC was appointed Encanto's exclusive worldwide potash marketing agent. Under the MMTC MOU, MMTC has the ability to sell potash sourced by Encanto into India or beyond.
MMTC is a Public Sector Undertaking of the Government of India. The MMTC MOU is expected to provide access to markets and increased pricing well beyond the primary market in India and as such, it is envisioned that sales to MMTC will primarily be bound for the Indian export market.
Encanto CEO and President, Stavros Daskos, stated: "I have so far travelled to India twelve times in the last 20 months and have developed a very deep understanding of India's regulatory systems in trading potash and other minerals. I now have a better vision of their true agricultural requirements and most importantly have cemented the trust, integrity and respect that is necessary to formulate an agreement of this magnitude. These agreements allow Encanto to participate in satisfying the Indian Government's need for food security instead of simply trading 5 million t of a commodity for profit. It has taken significant time and effort, but India is a key to the world market. These relationships and the proposed offtake agreement form the basis of our overall strategy and business plan to develop the Muskowekwan project and secure project financing required to build Canada's next major potash mine.”
“There are many key policy individuals in the Government of India who have helped educate, guide and give life to this transaction. I would like to formally acknowledge Shri Vinay Maloo, a very distinct gentleman and skilled businessman, who among many projects of national importance, co-founded the first private industry company to enter into the telecom sector in India, connecting over 800 000 villages across India. He was and continues to be instrumental in this process.”
“I would also like to thank Chief Bellerose, the people of The Muskowekwan First Nations, as well as his team that worked tediously and tirelessly to help bring this project together and whom continue to support its future."
Muskowekwan First Nation Chief, Reg Bellerose, commented: "Final commercial terms are currently being completed by Encanto and NACOF principals and are expected to be available in the near term. We're extremely proud to be a partner in this important agreement. For the first time in history, First Nation potash will help to feed communities around the world, both in India and nations beyond and to the benefit of all stakeholders; First Nations, farmers, the consumers of agricultural products, the governments of Canada and India as well as Encanto shareholders for decades to come."
Read the article online at: https://www.worldfertilizer.com/potash/09012017/encanto-potash-enters-into-offtake-agreement-with-nacof/