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Sirius Minerals announces partnership with ADM

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World Fertilizer,

Sirius Minerals has announced that it has signed an agreement with Archer Daniels Midland Co. (ADM) for the supply of binder for its POLY4 product. Sirius has also named ADM as its North American offtake partner.

The Managing Director and CEO of Sirius, Chris Fraser, said: “Sirius has been working with ADM for more than four years and today's announcement further strengthens our relationship by securing ADM as an important supplier and as a customer aligning our interests for the long-term and demonstrating the significant role POLY4 will play in the world fertilizer markets.”

Sirius originally entered into an offtake agreement with ADM in 2014, and subsequently replaced that agreement with an expanded agreement in 2015. The expanded agreement is for a seven-year period from commercial production, and includes two five-year extension options to supply volumes of POLY4 increasing to 1.5 million tpy in year five, with an option for an additional 0.5 million tpy. ADM’s fertilizer division, ADM Fertilizer, has operated since 2004, growing its distribution footprint to 14 river terminals, 12 interior terminals and operating in the wholesale distribution spaces as well as the farm focus space in 2016.

The President of ADM Fertilizer, Scott Nagel, said: “ADM was an early adopter of POLY4 and is excited to bring this multi nutrient low chloride fertilizer to our diverse end-user customers in the North American market including Mexico. The opportunity to expand our distribution into the Mexican market with a product like POLY4 supports the overall growth strategy of our business. We are pleased that Sirius sees the benefits of the efficient distribution system we have built in North America and we are looking forward to adding POLY4 to our portfolio of fertilizer products.”

POLY4 will be produced by extracting polyhalite from Sirius’ Woodsmith Mine, crushing and grinding the mineral, and then granulating the resulting powder using a starch binder under a patented process.

In the statement, Sirius claims that the agreement with ADM covers the following three main areas:

  • ADM will supply Sirius with binder for an initial five-year period from commencement of production with renewal options.
  • Sirius will both design and construct a binder handling facility with the support and expertise of ADM at or nearby Sirius’ materials handling facility in Teeside, UK.
  • ADM will continue its existing research and development programme on binders for POLY4 for a further three-year period. These research activities will help to evolve processes to develop the most efficient and effective methods for the granulation of POLY4.

As part of the binder supply agreement, Sirius claims that ADM is currently assessing how best to service the contract for the long-term. This assessment will reportedly include looking at the potential feasibility of constructing a new processing facility close to Sirius’ operations in Teeside to service both Sirius’ needs as well as supply for the broader UK market.

Johan Schrijver, Commercial Director, ADM Starches, EMEA, said: “This partnership has resulted in a greater understanding of the production of the POLY4 granules and has already identified operational savings and efficiency gains. Prior to the startup of production, joint research and development will continue to further develop the understanding of the opportunities for the end-product for all POLY4 customers around the globe.”

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