(Alliance News) - Emmerson PLC on Monday said it signed non-binding memoranda of understanding with Keytrade AG, a fertiliser trading company, and commodities trader Hexagon Group AG.
Emmerson is a developer of the Khemisset potash mine in Morocco.
Emmerson shares rose 9.5% to 5.09 pence each in London on Monday afternoon.
Under the MoU with Keytrade, Emmerson will sell at least 245,000 metric tonnes per year of muriate of potash, or MOP, for 10 years to the Zurich-based company.
Regarding the MoU with also Zurich-based Hexagon, Emmerson will sell the same amount of potash for 10 years, and sell 500,000 metric tonnes of salt product for 10 years.
"The prices for MOP, minimum of 60% potassium oxide, and sodium chloride are expected to be derived from the market or as quoted in independent expert reports, such as Argus Research, averaged to form a monthly price in the month prior to bill of lading, and after deducting a marketing fee," Emmerson explained.
Chief Executive Officer Graham Clarke said: "These MOUs are an important milestone in this process and will account for more than 65% of MOP production and 50% of salt production. Underpinning a significant proportion of future potash and salt sales on a take or pay basis is a strong endorsement for the project, de-risking the development for debt and other financiers."
By Tom Budszus; tombudszus@alliancenews.com
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Emmerson (EML)