The company behind plans to construct a world-leading potash mine near Sneatonthorpe say 85 per cent of its first phase production has already been sold.
Sirius Minerals has announced that it has entered into a memorandum of understanding for 5million tonnes of polyhalite from leading Chinese firm Sichuan Agricultural Means Group.
This deal will last 10 years and means the firm now has agreements and commitments for customers to purchase a total of 4.28million tonnes a year from the project.
Chris Fraser, Sirius managing director and chief executive, said: “This is yet another demonstration of the global demand for polyhalite, the importance of the York Potash project to the UK economy and the strong ties we are developing with China.”
Sichuan is a major agricultural production company with interests in fertiliser and is also involved in mining, feed and agricultural industrialisation.
The group has an annual turnover of 13 billion Chinese Yuan.
Mr Fraser added: “Discussions are ongoing with customers around the world which, combined with the existing arrangements, would represent more demand than the initial Phase 1 production target of 5 million tonnes per annum.”
Following a number of set-backs, shares at Sirius Minerals bottomed out at around 6p each in November.
Recently the company has been boosted by the news of these sales commitments and has recovered to almost 15p. This is still some way cheaper than the 30p high it achieved in January last year.
Last Monday Sirius announced that Keith Clarke CBE has been appointed as non-executive director with immediate effect.
He was chief executive officer of WS Atkins, the UK’s largest design and engineering consultancy, for eight years.
He is chair of trustees for Forum for the Future for the Future, non-executive director for Engineering UK, Future Cities Catapult and the British Standards Institute. He is vice-president of the Institute of Civil Engineering and adviser to both Infrastructure UK and the Government of Qatar.
Meanwhile, non-executive director Sir David Higgings has stepped down from the board due to his recent appointment as chairman of HS2 and his commitments with Network Rail.
A planning decision date for the mine has been delayed until at least July 2014.