African Potash Limited ('African Potash' or 'the Company')
1,500 Metric Tonnes Fertiliser Order from Zambia Co-Operation Federation
African Potash, the AIM listed company focused on the vertical integration of fertiliser operations in Africa and Sub-Saharan potash assets, is pleased to announce that it has received a purchase order (the "Purchase Order") for 1,500 Metric Tonnes ("Mt") of urea from the Zambia Co-Operative Federation ('ZCF'), a government body which counts over two million smallholder farmers as members. The Purchase Order has been made pursuant to a fertiliser supply agreement entered into by African Potash with ZCF ('the Agreement') and falls under the Government of Zambia's recently launched innovative E-Voucher system (the 'E-Voucher Scheme').
The Government of Zambia is investing approximately ZMK2.1 billion (~US$210 million) into the E-Voucher Scheme to create, enable and manage an integrated ecosystem of technical and financial support to promote agricultural development, empower the smallholder farmer and ultimately achieve food security. The E-Voucher Scheme will enable the purchase of inputs (fertiliser, seed, pesticides, equipment) by smallholder farmers. Under the E-Voucher Scheme, the Government of Zambia provides farmers with a voucher with a value that is used to buy agricultural inputs from specified, government approved outlets without cash changing hands. Under the arrangement, fertiliser is owned by Gavilon, part of the Marubeni Corporation ("Gavilon"), until payment is received from ZCF under the E-Voucher Scheme. African Potash would then expect to receive a margin payment from Gavilon of approximately US$65 per Mt of fertiliser sold. African Potash is not required to meet the cost of the fertiliser supply from its margin payment.
Deliveries have now commenced under the initial Purchase Order for 1,500Mt of Urea, with ZCF being responsible for logistics and transport. The Agreement provides African Potash with an opportunity to supply fertiliser to ZCF for a minimum period of three years and further trades are anticipated in the coming months.
African Potash Executive Chairman Chris Cleverly said: "African Potash, together with our trading partners, are strong supporters of the E-Voucher Scheme and recognise the potentially ground-breaking implications for the agricultural development of Zambia which can be delivered through its execution. With our partners at COMESA, we are creating a sustainable model for the agricultural sector in Zambia and the region.
"Deliveries are now beginning and we look forward to building on these trades in the coming months."
African Potash is an AIM quoted company focussed on building a vertically integrated platform for the mining, production and distribution of fertiliser, primarily within Africa.
The Company has a trading agreement with the Common Market for Eastern and Southern Africa ('COMESA'), a free trade union for twenty African member states, to supply and deliver fertiliser to off-takers identified and introduced by COMESA.
The Company also operates the Lac Dinga Project in the Republic of Congo, which is prospective for potash.
Market Abuse Regulations (EU) No. 596/2014
"The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the publication of this announcement via Regulatory Information Service ("RIS"), this inside information is now considered to be in the public domain."
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