Sirius Minerals PLC (LON: SXX) Signs ‘Major’ Distribution Deal with Qatar

The owner of the Whitby Potash mine has signed what they describe as “a major supply and distribution deal” with a state-owned Qatari company.

Muntajat markets and distributes approximately 9 million tonnes of fertilizer per annum. The ten-year supply and distribution agreement covers most of Africa along with Australia, New Zealand and certain Middle Eastern and Asian territories

The contracted will see Sirius supply over two million tonnes of it’s POLY4 product each year – taking Sirius’ aggregate peak sales volumes to 13.8 tonnes per year.

Chris Fraser Managing Director and CEO of Sirius, comments:

“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 Mtpa.”

Abdulrahman Ali Al-Abdulla, Chief Executive Officer of Muntajat, comments:

“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.”

Muntajat is a state-owned Qatari company established in 2012 which markets, distributes and sells over 16 million tonnes of fertilizer, polymer, chemical and steel products each year including approximately 9 Mtpa of fertilizer. Muntajat represents and is exclusively responsible for the global sales and distribution of products from 15 major industrial production entities in Qatar and for marketing, selling and distributing all of Qatar’s fertilizer production. Muntajat has a global marketing network servicing more than 3,000 customers in 135 countries from Doha and 17 international locations.

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Qatar is one of the largest urea producers in the world with a 14 per cent. share of world supply and produces approximately 5.6 Mtpa of urea as well as 3.8 Mtpa of ammonia and 2.3 Mtpa of sulphur.

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 Mtpa in year five and further to 2.1 Mtpa in year eight. The Agreement takes Sirius’ aggregate peak sales volumes to 13.8 Mtpa and peak contracted production in any one year to 12.2 Mtpa, excluding options.

In addition to the Agreement, Sirius is working with Muntajat to explore the combination of POLY4 with nitrogen products in Qatar and/or the United Kingdom to create a value-added multi-nutrient fertilizer.

The Agreement expands the Company’s existing relationship with the state of Qatar, which, through the Qatar Investment Authority (“QIA”), is one of the largest investors in Sirius.

Ben Houchen, Mayor of the Tees Valley

We were all upset and disappointed with the news from Sirius Minerals a few weeks ago, and I was disappointed the Government didn’t do more to help but, as I said at the time, this project will happen.

We in Teesside are used to overcoming adversity and when we get knocked down we get back up! Sirius are a great local business with that same Teesside mentality, which is why they’re fighting back.

Today they’ve signed a deal with leading fertiliser distributer Muntajat to supply up to 2.1 million tonnes of product a year!

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Sirius now has contracts in place that takes total peak sales volumes to 13.8 million tonnes a year.

There’s still work to do, but I’m confident Sirius will secure the funding they need and deliver this truly transformational project.

This is welcome news following a difficult few weeks for Sirius and local workers.

 

Source Link www.yorkshirecoastradio.com/news

 

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