OFFTAKE AGREEMENT
4/5/22: “MICHIGAN POTASH & SALT CO. SIGNS ‘100% OFFTAKE AGREEMENT’ WITH ANONYMOUS AGRICULTURAL LEADER”:
Michigan Potash & Salt Company issued yet another press release, this time announcing: “…the execution of an offtake agreement with a major United States-based agricultural company to take and distribute 100% of its first phase potash fertilizer production.” This is an agreement to “…provide U.S. farmers with 650,000 tons annually of ultra high-grade white potash fertilizer.” Like so much of the “information” coming out of MPSC, this just doesn’t quite make sense. Why would any “major United States-based agricultural company” commit to buying potash 5-10 years before it becomes available? After years of a worldwide glut due to overcapacity, does this “major agricultural company” (unnamed) really anticipate potash shortages in the U.S.? Are they unaware that BHP is presently building a huge mine just across the border in Saskatchewan that’s slated to produce 5 million tons per year during its initial phase? [ That mine is expected to begin producing in 2027, likely putting it well ahead of MPSC. ] And what of Michigan Potash and Salt Company itself? Having never tried their hand at mining before, are they really this supremely confident of being able to “…provide U.S. farmers with 650,000 tons annually…” despite the fact that their highly experienced predecessors were never able to exceed 150,000 tons per year?
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