African Potash surges on fertiliser distribution deal

Shares in AIM-listed exploration company African Potash surged after it announced that it has entered into a trading agreement with Comesa, a free trade union of twenty African countries, to supply 500,000 tonnes of fertiliser a year.

At 1127 BST, African Potash shares were up 7.5% at 0.33p. The company in June said it had been in negotiations with Comesa for some time.

The company said the agreement complements its Lac Dinga potash project in the Republic of Congo and provides near-term revenue potential, with a strong customer base expected as a result.

African Potash’s executive chairman, Chris Cleverly, said: “The signing of this trading agreement with Comesa is a significant step as we seek to transform the company into a vertically-integrated African fertiliser business.

"By adding a credible trading operation to our existing exploration operations we have demonstrated our commitment to this project, with the added benefit of generating short term cash-flows from first-class customers who have been identified and introduced by Comesa."

Under the terms of the memorandum of understanding, Potash and the Mask Africa Crowd Farm Fund will supply and deliver at least 500,000 tonnes of fertilisers during an initial three-year period and Comesa will receive a commission fee of between 5% and 7.5% from sales.