Salt Lake Potash reaches offtake deal with Mitsui

Salt Lake Potash has signed a binding term sheet with Mitsui for the sale of premium water-soluble sulphate of potash (SOP) from its Lake Way Project in Wiluna, Western Australia.

The AIM and ASX-traded firm described Mitsui as a “major global manufacturer and distributor” of fertilisers, and would deliver the product into key Asian markets.

It said it had now secured offtake for 224,000 tonnes out of the 245,000 tonnes of production per annum at Lake Way, with the remaining tonnes expected to be sold into local and spot markets.

The agreement with Mitsui covered the sale of SOP into Bangladesh, Cambodia, Japan, Malaysia, the Philippines, South Korea, Sri Lanka and Taiwan over a period of five years.

Salt Lake said it would initially provide 4,000 tonnes per annum of SOP to Mitsui, with the two companies developing a further agreement for additional tonnes of water soluble SOP to be sold into emerging markets.

The water soluble market provides premiums of up to 20% above standard SOP pricing, Salt Lake explained.

It said the production of water soluble SOP was one of its key competitive advantages in the seabourne SOP market.

“The agreement represents a further endorsement from a major global fertiliser distributor for both the Lake Way Project and its premium SOP products,” the Salt Lake Potash board said in its statement.

“The company now has a global portfolio of five offtake partners covering sales across six continents.”

At 1339 GMT, shares in Salt Lake Potash were up 6.03% in London, at 34.46p.