Sirius Minerals signs European supply and distribution agreement with BayWa AG


Sirius Minerals has announced today a new supply and distribution agreement. The company, which is developing a new polyhalite mine in North Yorkshire, UK, has agreed a 10-year supply and distribution agreement with BayWa Agri Supply and Trade (BAST) for its POLY4 product.

SiriusMinerals Woodsmith Mine July 2018 webBAST is a subsidiary of agricultural distributor BayWa AG, headquartered in Munich, Germany with revenues of Eur16bn (2018). BayWa distributes 30 million t/y of agricultural goods across Europe, including 2 million t/y of fertilizers. BAST intends to distribute POLY4, which is a multi-nutrient fertilizer containing potassium, sulphur, magnesium and calcium, through its Cefetra business.

The agreement provides for a guaranteed minimum volume of POLY4 across most of Europe for a 10-year term that begins from the first production. The Woodsmith mine is scheduled for start-up in 2021. The guaranteed minimum volumes under the agreement increase to 2.5 million t/y in year-five. The agreement also provides for an option for Sirius to elect for BAST to purchase and distribute additional volumes above the guaranteed volumes, said Sirius in its statement.

In terms of pricing, the statement read as follows:

“The pricing mechanism in the Agreement is linked to the downstream pricing received by BAST on the sale of POLY4 in Europe. The price received by Sirius under the Agreement is determined by the price received by BAST with reference to benchmark pricing and the nature of the final BAST customer. BAST is incentivised to sell the product further down the value chain (i.e. closer to the farmgate) and to optimise the best FOB netback price for Sirius.”

Commenting on the agreement, Daan Vriens, CEO of BAST, said:

“We are excited to be partnering with Sirius to bring a high performing, multi-nutrient fertilizer like POLY4 to customers across Europe through Cefetra. We believe in long term partnerships and we feel confident that this will be a successful new endeavour. POLY4 fits with our sustainability and farmer services strategies across our markets. This will provide farmers, via our extensive networks, a fertilizer product that promotes sustainable agricultural practice in our home market, Europe.”


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