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Shares in Sirius Minerals have risen after the company secured a European distributor for product from its North Yorkshire mine.

The company has agreed a deal which will see German agricultural giant BayWa buy up to 2.5m tonnes a year of its fertiliser polyhalite.

Sirus said the 10-year exclusive supply agreement would deliver the highest price of any of the deals it has so far agreed for its POLY 4 product.

Work is continuing on the firm's Woodsmith mine, south of Whitby, from where product will be transported on an underground conveyor to Teesside.

Chris Fraser, managing director and chief executive of Sirius, said: “The European fertilizer market is highly advanced and the second largest in the world behind China.

“We are delighted to be partnering with a leading agribusiness to distribute our POLY4 product into this key market.

“Our exclusive partnership with BayWa will enable us to reach downstream customers through the groups’ well-established and extensive logistics network and long-term, trusted relationships with farmers.

Our exclusive partnership is structured to enable us to achieve maximum value for our POLY4 product.”

(Image: Gazette)

BayWa will distribute POLY4 through its Cefetra business, a well-established distributor and trader in Europe.

The agreement will start when Woodsmith mine begins production and includes five-year extension options.

Shares in Sirius climbed more than 4% during early trading in London following the announcement.

The company last month announced it had secured an “alternative financing proposal” to fund its £3.5bn mine project.

It said a “major global financial institution” has stepped in with an alternative plan - and was is pausing talks with other lenders.

Sirius currently employs 800 people and says it will create 1,000 long-term jobs at peak production.

It expects to reach the polyhalite seam in 2021 and to be producing 10m tonnes of fertiliser a year by 2024, supporting more than 2,000 direct and indirect jobs in total.