Monday 17 September 2018 2:18 pm

Sirius Minerals signs Brazilian supply deal for its Yorkshire mine


Sirius Minerals has signed a new supply deal in Brazil for its Yorkshire mine as it continues to recover from soaring project costs.

The company's shares tumbled more than 18 per cent earlier this month when the miner said it may need an extra $600m (£456m) to construct its mine under the North York Moors.

Last week the company struck a $250m deal with Hancock British Holdings – in exchange for five per cent of the project's royalties – easing some concerns over funding.

Read more: Sirius shares crash after rising Yorkshire mine costs

It has now announced a supply agreement with Cibra, Brazil's sixth largest fertilizer distributor, for up to 2.5 million tonnes of POLY4 fertiliser once the mine begins producing.

The Cibra supply deal, which takes the total contracted sales volume up to 8.2 million tonnes per annum (mtpa), has seen shares rise more than four per cent today gaining back some ground.

Sirius has also taken a 30 per cent stake in Cibra.

Sirius chief executive, Chris Fraser, said Cibra was a leading player in the South American fertilizer market.

Read more: Sirius cuts $250m deal to fund rising Yorkshire mine project

He said: “Cibra is a perfect partner for distributing POLY4 into this key market, where trials have demonstrated how it can significantly enhance farming economics.

“The Cibra offtake agreement takes us beyond our targeted seven mtpa and is a major step forward as we look to complete stage two financing and building our global fertiliser business.”