The Agreement provides for the exclusive distribution of POLY4 for a 10-year term that commences from commercial operations and includes a five-year extension option. Minimum volumes relating to the specific territories under the Agreement increase, in aggregate, to approximately 2.0 million tpy in year five and further to 2.1 million tpy in year eight. The Agreement takes Sirius’ aggregate peak sales volumes to 13.8 million tpy and peak contracted production in any one year to 12.2 million tpy, excluding options.
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 incentivises Muntajat to optimise the best FOB netback price for Sirius. Sirius expects the Agreement to deliver pricing in line with its average price expectations across the current supply agreement portfolio.
Chris Fraser Managing Director and CEO of Sirius, commented: “We are delighted to expand our growing partnership with Qatar through this long-term supply agreement with Muntajat. Qatar is already a major investor in Sirius via QIA and Sirius is working with Muntajat to explore the downstream combination of POLY4 with nitrogen products in Qatar and/or the United Kingdom to create a value-added multi-nutrient fertilizer. 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, commented: “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.”
Read the article online at: https://www.worldfertilizer.com/project-news/14102019/sirius-minerals-enters-supply-and-distribution-agreement-with-muntajat/
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