Australian Potash signs fourth fertiliser deal

Australian Potash has secured the majority of revenue forecast for its Lake Wells potash project in Western Australia after signing its fourth fertiliser offtake deal.

German company HELM AG has committed to a 10-year take-or-pay arrangement for 30,000 tonnes of Australian Potash’s K-Brite sulphate of potash (SOP) produced from Lake Wells each year.

That brings the total offtakes for the project to 130,000tpa, representing more than 85 per cent of Lake Wells’ projected output of 150,000tpa.

Australian Potash managing director Matt Shackleton said HELM was a tier one international chemicals and fertiliser distributor.

“Our Lake Wells product will be distributed into the lucrative and expanding European fertiliser market through HELM’s dominant brand and market leading position,” he said.

“HELM’s clear strategic direction is to expand their value in brand across the world’s major fertiliser markets, and the marketing and distributorship of SOP forms an integral piece in their offering.

“It is enormously gratifying that Australian Potash’s K-Brite brand will be central to that program on the European continent.”

Mr Shackleton said the company was progressing approvals and financing programs for Lake Wells, including with the Northern Australia Infrastructure Facility.

Australian Potash’s 18.1 million tonne Lake Wells project is located in the north-eastern Goldfields, and is expected to produce 150,000t of SOP per annum.

It holds a net present value of $665 million.

The company has signed other offtake deals with US company Redox, Canada-based Migao and Japan-based Mitsui & Co. 

Australian Potash emerged from a trading halt this morning, closing up 2.6 per cent to trade at 7.8 cents per share.