(Sharecast News) - Sirius Minerals announced the signing of a take-or-pay supply agreement between its wholly-owned subsidiary York Potash, OFD Supply and Cibrafertil Companhia Brasileira de Fertilizantes - the Cibra Group - for the supply and resale of POLY4 into Brazil and certain other countries in South America.The FTSE 250 company said that it also agreed to acquire, through one of its wholly-owned subsidiaries, a 30% equity interest in each of the Cibra Group companies for a total of 95 million fully paid ordinary shares of Sirius.It explained that the supply agreement provided for the resale of POLY4 on an exclusive basis into Brazil, Bolivia, French Guiana, Guyana, Paraguay, Surinam, Uruguay and Venezuela, and on a non-exclusive basis into Argentina, Chile, Colombia, Ecuador and Peru.The initial contract term of seven years could be extended for two additional five-year periods.Minimum contracted take-or-pay volume commitments under the agreement would increase to 2.5 Mtpa by the seventh year following the commencement of commercial production, Sirius explained.The supply agreement contained provisions which would allow Cibra to roll forward and roll back a small proportion of take-or-pay volumes between contract years.Pricing terms included a minimum commitment price that was linked to relevant product benchmarks, as well as a "unique" downstream price participation mechanic which would enable Sirius to benefit from higher realized POLY4 prices for the duration of the contract.Pricing to be received by Sirius under the supply agreement was expected to be "broadly in line" with other offtake agreements in the early years of supply, with the potential to realise higher pricing sooner than the company's existing supply agreements.The acquisition of the 30% interest in each of the Cibra Group companies was expected to include access to "key markets" for the long-term growth of Sirius, and the ability for Sirius to participate in the strategic direction and marketing strategy of the Cibra Group, the board explained.It would also provide protection for Sirius' route to market.Following completion of the acquisition of the equity in the Cibra Group companies management would remain unchanged, however under the shareholder agreements Sirius would have the right to appoint a director, with Chris Fraser to join the boards of each of the Cibra Group companies.In line with an investment of such size and nature, certain strategic matters relating to the Cibra Group companies would require unanimous approval by the parties, with the shareholder agreements also containing what Sirius described as "typical" pre-emptive rights, transfer protections and rights and change of control protections.The Sirius shares issued to the shareholders of the Cibra Group companies would be subject to a lock-up period of 12 months.Completion of these arrangements remained subject to the satisfaction of certain conditions precedent, and was expected to take place in the coming weeks."We are excited to be entering into this long-term partnership with Sirius to deliver POLY4 into Brazil and other key markets of South America," said Cibra chief executive officer Santiago Franco."The supply agreement provides Cibra with access to a unique multi-nutrient product that will play an important and valuable role in one of the fastest growing fertiliser markets in the world."POLY4 will change the shape of the fertiliser market in South America and Cibra will be at the heart of driving the growth and adoption of this innovative sustainable product across the region."Chris Fraser, managing director and CEO of Sirius, added that his company was "delighted" to have signed the supply and investment agreements with a "leading player" in the South American fertiliser market, with a proven track record and "ambitious" growth plans."Cibra is a perfect partner for distributing POLY4 into this key market, where trials have demonstrated how it can significantly enhance farming economics," Fraser explained."The Cibra offtake agreement takes us beyond our targeted 7 Mtpa and is a major step forward as we look to complete Stage 2 financing and building our global fertiliser business."