Global commodities trading group Possehl Erzkontor GmbH &
Co KG has signed a memorandum of understanding (MoU) with
Tertiary Minerals plc under which it will purchase acidspar
from Tertiary’s three fluorspar projects once
production starts.
Possehl will commit to buying a minimum of 70% of
commercial-grade acidspar under the agreement, which will be
effective from the date of execution to a date that is one year
from the start of first commercial production at any of the
three fluorspar projects.
Tertiary controls two significant Scandinavian projects,
Storuman in Sweden and Lassedalen in Norway, as well as a
deposit in Nevada, United States, which is called the MB
project.
As a condition of the offtake agreement, Possehl will
provide part of the pre-financing to Tertiary under which funds
will be advanced to Tertiary to assist it in meeting its
working capital needs and/or its capital investment needs for
the development of the fluorspar projects.
Fluorspar is an essential raw material in the chemical,
steel and aluminium industries.
Stronger hydrofluoric acid and aluminium fluoride markets are
also driving acidspar prices higher - the material is a key
feedstock for both industries.
After several years of low prices and weak demand, this
uptick in prices could be a turning point for the fluorspar
market, several market participants told Industrial
Minerals.
Production of fluorspar has decreased in recent years, and
many consumers are eager to see new supply come onstream to
plug the gap.
Tertiary, which is listed on London’s
Alternative Investment Market (AIM), has been moving forward
with the Storuman project in Sweden, putting the mine through
the permitting process in recent months, while metallurgical
testwork at MB in Nevada is also progressing, according to the
company’s latest operational update in
October.
"This strategic relationship represents a critical building
block in our quest to becoming a leading supplier of fluorspar
to the global markets," Tertiary managing director Richard
Clemmey said in a statement.
"Not only does this provide the company with the opportunity,
and competitive advantage, to secure long-term sales
contracts with key fluorspar end-users," he added, "but also
access to pre-financing, which can form an important part of
the overall development funding package for our fluorspar
projects and potential future acquisitions."