Australian Potash Ltd (ASX:APC) has signed the first binding term sheet with Tier 1 partner Redox Pty Ltd for the supply of 20,000 tonnes per annum (tpa) of premium K-BriteTM sulphate of potash from the Lake Wells Sulphate of Potash Project (LSOP), in Western Australia's Eastern Goldfields
Managing director and chief executive officer Matt Shackleton said: “We are pleased to announce the first binding term sheet for offtake supply, covering sales and distribution rights to K-BriteTM in Australia and New Zealand.
“Our new partnership with long-established Australian company Redox, who from its Sydney base has built broad trade relationships and an extensive global distribution network, delivers APC’s first step in the larger offtake program.
“Ultimately APC will have a large proportion of the planned 150,000 tpa output from the LSOP under offtake agreements, and we look forward to updating shareholders on our progress in the near future.
“The emerging Australian SOP sector is gaining credibility on the international stage, and it is pleasing to see APC’s rigorous approach to both the technical and commercial aspects of its solar salt SOP project being recognised.”
Redox is an Australian based company which is one of the world’s leading chemical and raw material distributors to industry.
The key terms of the agreement include:
- Binding agreement to take-or-pay 20,000 tpa of K-BriteTM over an initial 10-year term
- Pricing based on the market price minus traditional ‘net back’ costs including a marketing fee and ‘flow through’ shipping, storage and handling costs (net realised price) to incentivise Redox to achieve the highest sales price in the market.
- K-BriteTM sales and distribution rights on an exclusive basis to Australia and New Zealand
- Subject to the finalisation of long-form documentation
Australia Potash is also in discussions with further Tier 1 offtake partners covering Asia (excluding China), Europe, the Americas and China.