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Landmark Trading Agreement with COMESA
African Potash, the AIM listed exploration company focused on sub-Saharan potash assets, has entered into a trading agreement with the Common Market for Eastern and Southern Africa and the Mask Africa Crowd Farm Fund Limited, with a view to creating a vertical platform for the mining, production and distribution of fertiliser, focussed on the Eastern and Southern Africa (COMESA States) region and beyond.
This represents a significant step in the development of the Company’s corporate strategy to transform into a vertically integrated African fertiliser business. This is the first agreement of this nature entered into by COMESA, the signing of which represents a significant milestone in the African fertiliser industry and provides the Company with first-mover advantage.
Highlights:
· African Potash enters into three year fertiliser trading agreement with COMESA to supply and deliver at least 500,000 metric tonnes of fertilisers on an annual basis during an initial three year period to off-takers identified and introduced by COMESA
· Trading agreement complements the Company’s Lac Dinga Potash Project in the Republic of Congo, which continues to advance
· Near term revenue potential and a strong customer base expected as a result of the trading agreement
· African Potash now has a prime interest in both the exploration & extraction and trading sectors of the fertiliser industry as part of strategy to create a vertical platform for the mining, production and distribution of fertiliser
· Further upside available – the Company is developing strategic opportunities to add additional complementary industry division
· Further details of the Trading MOU are set out below.
George James Magai, Director of Trade and Markets of COMESA/ACTESA, said, “We are delighted to enter into this MoU with African Potash and look forward to working with them to deliver and implement the joint fertiliser procurement initiative (Abuja declaration 2006) over the next 10 years. I believe this will be a game changer for the agricultural sector in the COMESA region.”
African Potash 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.
“Given the growing need for development of a large scale agricultural industry within Africa to feed the African population and the importance that fertilisers will inevitably hold in this development being successful, we believe that our strategy to develop a vertically integrated business with operations at all levels of the “fertiliser chain” will prove to be attractive to, and provide significant value and benefits for all stakeholders, investors and end users alike. We will continue to provide updates as we further implement this strategy.
“Finally, I wish to thank Sindiso Ngwenya and the team at COMESA for their hard work in finalising this agreement. We look forward to a long and mutually successful relationship with COMESA.”
