SIRIUS MINERALS EXPANDS RELATIONSHIP WITH ARCHER DANIELS MIDLAND
(Sharecast News) - Fertilizer development company Sirius Minerals on Tuesday expanded its relationship with US-based agri-business Archer Daniels Midland.
Having worked with Sirius for over four years, ADM has now been unveiled as Sirius's North American off-take partner, having formerly only been known as an unnamed Fortune 500 company.
Sirius originally announced a five-year agreement for 0.5m tonnes per year in early 2014 before in August 2015 expanding the agreement to seven years, with two five-year extension options and with volume increasing to 1.5Mtpa in the fifth year with an option for an additional 0.5Mtpa. Pricing was confidential, albeit based on a formula linked to the market price of nutrients contained in polyhalite, according to Sirius.
NYSE-listed ADM has also now agreed to supply binder for the company's POLY4 branded fertilizer product for a period of five years. The supplied starch binder will be used to granulate crushed and ground polyhalite at a new binder handling facility close to the planned materials handling facility in Teesside, not far from Sirius's Woodsmith Mine in North Yorkshire.
Chris Fraser, managing director and chief executive of Sirius, said: "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 said earlier this month that Woodsmith remained on track to deliver first polyhalite in 2021.
Ranked at number 48 in Fortune's famous 500, ADM is one of the world's largest agricultural processors and food ingredient providers, as well as a major commodities trading house. Its ADM Fertilizer arm has a distribution footprint of 14 river terminals, 12 interior terminals and operations in the wholesale distribution and farm focus spaces.
Scott Nagel, president of ADM Fertilizer, said: "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."
Sirius Minerals' shares were up 2.24% at 36.46p at 0945 BST.
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