Global law firm Norton Rose Fulbright has advised Danakali Ltd and its subsidiary, Colluli Mining Share Corporation (CMSC), on a bankable binding take-or-pay offtake agreement with EuroChem Trading GmbH (EuroChem) in relation to up to 100 per cent of the Module 1 Sulphate of Potash production from CMSC’s Colluli Potash Project, located in Eritrea.
Norton Rose Fulbright acted as Danakali and CMSC’s legal adviser in relation to the agreement, supporting negotiations and associated legal drafting.
EuroChem will take, pay and distribute up to 100 per cent of CMSC’s available Module 1 SOP production, minus up to 13 per cent at CMSC’s option. The contract is for a 10-year term with an option to extend for a further three years. The agreement is innovatively structured to minimise the working capital load on CMSC.
The Norton Rose Fulbright team was led by Perth partner Jake Howard with assistance from Brisbane partner, Keira Brennan, and Melbourne partner, Hazel Brasington.
Jake Howard said: “We are very proud of the support that we have provided to Danakali and CMSC in reaching this significant milestone. We worked very closely with Danakali to develop an innovative and bankable agreement that will underpin the future financing and development of the Project. There was considerable interest from a number of international fertilizer trading companies in the offtake and it is a fantastic result for Danakali to achieve a bankable offtake agreement with a significant international partner, such as EuroChem. I would also congratulate the EuroChem team for the collaborative manner in which the offtake was negotiated. We look forward to working with Danakali on the next phase of this exciting project.”
The firm continues to advise Danakali and CMSC on the development and financing of the Colluli Potash Project.
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Kate Farrell, Public Relations Executive
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