A deal has been completed which will see one million tonnes of potash mined from under Scarborough sold to China every year for a decade.
Directors at Sirius Minerals, the company planning to build a billion pound potash mine at Sneaton, have been working to find buyers for the polyhalite which is used across the world as a plant fertiliser.
Last week the sales team clinched a deal with Chinese firm Yunnan TCT Yong-Zhe Company (TCT), which has agreed to purchase one million tonnes per annum, on a ten year contract starting from 2017.
The deal pre-empts any official go-ahead for the mine, which is set to create 5,000 jobs in construction and production according to Sirius.
The North York Moors National Park planning authority received a planning application from York Potash, a subsidiary of Sirius Minerals, earlier this year with a decision due on Monday, July 29.
The price agreed for the potash ‘offtake’ is confidential, but will remain fixed per tonne for the first three years.
Contained in the deal between Sirius and TCT are a number of conditions including collaboration on testing and results from crop trials of polyhalite in Yunnan and also Chinese government approvals.
The signing ceremony took place on Thursday last week in Kunming and was attended by senior government officials from the Yunnan Province as well as senior executives from the Industrial and Commercial Bank of China.
Yu Yan Qing, chief executive of TCT, said: “We see great potential in polyhalite as an organic multi-nutrient fertilizer that can provide a competitive advance in agricultural efficiency and helping to increase crop yields and quality in China.
“This is an important step for a long term and prosperous relationship between TCT and Sirius Minerals.”
TCT is one of the fastest growing domestic agricultural products companies in China, integrating production and distribution of agricultural products along with import and export trade and agrochemical services.
Privately owned, TCT’s head office is in Kunming in the Yunnan Province and also operates in the agricultural provinces of Sichuan, Guizhou, Hainan, Guangzhou, plus Beijing and Shanghai.
Chris Fraser, managing director of Sirius, said: “This is a major milestone for the company that further demonstrates the market for polyhalite, supports the economics behind the project and will ultimately help to give confidence in the financing for construction.
“The Offtake agreement is the latest endorsement of the global demand for polyhalite, its unique multi-nutrient qualities and the role that balanced fertilisation can play in the largest fertilizer market in the world.
“We look forward to working with TCT to realise the outstanding potential for polyhalite.”