MMTC inks potash supply pact with Canada’s Encanto

MMTC inks potash supply pact with Canada’s Encanto

6:56 AM, 21st April 2016
MMTC inks potash supply pact with Canada’s Encanto

NEW DELHI, INDIA: Metals and Minerals Trading Company of India (MMTC), under the ministry of commerce said it has agreed with Canada’s Encanto Potash Corp for supply of potash.

As per an earlier outlined base terms to a long term off-take agreement, Encanto confirms that the MoU is now expanded for an annual supply of a minimum of 2,000,000 metric tonne of potash (approximately $600 million at current prices) from Encanto’s Muskowekwan project, located in Saskatchewan.

The MoU also allows for the immediate supply of potash by Encanto to MMTC, which can be sourced from existing producers while Encanto concurrently continues to develop the Muskowekwan project. Encanto now intends to create a joint trading company in an expanded working relationship with the Muskowekwan First Nation to ensure that the company can begin to supply potash to satisfy MMTC’s needs in the near future as well. The plan is to become an active potash company and to secure substantial near term cash flow; a rarity for a junior potash developer.

In addition, the MoU provides that MMTC will also act as Encanto’s worldwide distributor of potash on an exclusive basis, which is expected to provide access to markets and increased pricing well beyond the primary market in India.

“Due to a combination of the size, high grade reserves, the simple geology, low environmental impact, solution mining advantages in terms of employment safety and faster path to production, it was determined that Encanto offers the best potash opportunity for India such that MMTC decided to move forward with a long term supply agreement. This will bring the company great options, including significant near term revenue and a bright long term future,” said Stavros Daskos, president, Encanto.

© Business Standard News

Read more:

Encanto signs MOU with India’s Metals and Minerals Trading Corp



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