Junior sulfate of potash (SOP) producer Agrimin Ltd., Nedlands, Western Australia, reported on May 18 that it has signed a binding ten-year offtake agreement for 150,000 mt/y of SOP from its Mackay Potash Project with Sinochem Fertilizer Macao Ltd., a unit of Sinofert Holdings Ltd., China’s main importer of potash. Agrimin said this is the largest offtake volume for any Australian SOP project and that it represents one-third of the company’s planned production of 450,000 mt/y.
“Sinochem Fertilizer Macao is a Tier 1 offtake partner and we welcome this long-term relationship with China’s main importer of potash to create an important supply channel for Agrimin’s SOP into the world’s largest SOP market,” said Mark Savich, Agrimin CEO.
“This large tonnage, long-term supply deal with Sinochem Fertilizer Macao is testament to the quality and scale of the Mackay Potash Project. It is also further evidence of the considerable interest in the environmental and organic credentials of Agrimin’s SOP product,” he continued. “We are at an advanced stage of negotiations with other major fertilizer companies in different regions, and we expect to announce further developments in the near term to underpin project financing.”
For the first two years of ramp up, supplies to Sinochem will be 90,000 mt and 120,000 mt, for year one and two, respectively. The product is for sale and distribution only in China, and pricing is to be renegotiated quarterly based on a Chinese SOP index. There is a delivery minimum of 15,000 mt bulk shipment volume per delivery.
Conditions precedent include Agrimin making a final investment decision to develop the project and the commencement of commercial production by June 30, 2025.