Brazil Potash Signs Memorandum of Understanding with Keytrade AG for Up to One Million Tons of Potash Offtake Per Year

Rhea-AI Summary

Brazil Potash (NYSE-American: GRO) has signed a memorandum of understanding (MOU) with Keytrade AG for potential offtake of up to one million tons per year of potash from its Autazes Potash Project. This agreement marks the company's second major potential partnership, following an existing offtake agreement with AMAGGI.

The combined potential commitments now total approximately 1.5 million tons of the company's planned 2.4 million tons of annual potash production. This development strengthens Brazil Potash's position as an emerging domestic supplier for Brazilian agriculture and provides foundational support for project financing.

Positive

• Secured potential offtake agreement for up to 1 million tons of potash annually with Keytrade AG
• Total potential commitments now reach 1.5 million tons out of 2.4 million tons planned annual production (62.5% of capacity)
• Strategic partnerships strengthen project financing prospects

Negative

• MOU is non-binding and represents only potential commitments
• Project still in development phase with no current production

Insights

Commodities Market Analyst

The MOU with Keytrade AG represents a significant commercial milestone for Brazil Potash, potentially securing offtake for approximately 42% of their planned annual production capacity. Combined with the existing AMAGGI agreement, the company has now lined up buyers for roughly 63% of its planned 2.4 million tons annual output.

From a market perspective, this pre-commitment strategy is particularly shrewd given Brazil's heavy reliance on potash imports and the ongoing geopolitical tensions affecting global supply chains. The Autazes project's domestic location provides a strategic advantage in serving Brazil's massive agricultural sector, potentially reducing import dependencies and transportation costs.

The partnership with Keytrade, a major global fertilizer trader, adds credibility to the project and could facilitate easier access to project financing. Having strong offtake agreements in place typically reduces project risk and can lead to more favorable financing terms. For retail investors: Think of these MOUs as "pre-orders" that validate the business model and help secure funding - similar to how automotive manufacturers use pre-orders to demonstrate demand.

Agricultural Supply Chain Expert

This agreement marks a pivotal development in Brazil's agricultural supply chain dynamics. Keytrade's involvement, as a major global fertilizer trader, indicates strong market confidence in Brazil Potash's ability to deliver domestic supply. The strategic importance cannot be overstated - Brazil currently imports about 96% of its potash needs, making it vulnerable to international supply disruptions and price volatility.

The Autazes project's location in Manaus provides significant logistical advantages, potentially reducing the traditional 45-60 day shipping times for imported potash to just days for Brazilian farmers. In simple terms: imagine cutting the distance of your grocery delivery from across the country to just across town - that's the efficiency gain we're looking at here.

The total potential commitment of 1.5 million tons between Keytrade and AMAGGI represents a robust foundation for the project's commercial viability. This positions Brazil Potash to potentially capture a significant share of Brazil's annual potash consumption, which typically exceeds 13 million tons.

• MOU Advances Brazil Potash's Commercialization Strategy with Second Major Potential Partner
• Further Validates Brazil Potash's Position as an Emerging Domestic Supplier for Brazilian Agriculture

MANAUS, Brazil, Jan. 16, 2025 (GLOBE NEWSWIRE) -- Brazil Potash Corp. (“Brazil Potash” or the “Company”) (NYSE-American: GRO), a company developing and constructing the largest potash fertilizer project in Brazil, today announced the signing of a memorandum of understanding ("MOU") between Potássio do Brasil Ltda., a wholly-owned subsidiary of the Company, and Keytrade AG ("Keytrade"), one of the world's leading fertilizer trading companies, for potential offtake of up to one million tons per year of potash from the Company's Autazes Potash Project (the "Project").

"This MOU with Keytrade represents another important step towards Brazil Potash's development and validates our strategic position in Brazil as a potential premier domestic potash supplier," said Adriano Espeschit, President of Potassio do Brasil. "Combined with our existing offtake agreement with AMAGGI, we have now secured potential commitments for approximately 1.5 million tons of our planned 2.4 million tons of annual potash production, providing strong foundational support for project financing."

About Keytrade AG

Keytrade AG, a company founded in Switzerland in May 1997, was established by senior mineral fertilizer traders who have been working in the sector for many decades. Today, Keytrade AG is a leading fertilizer company and its employees in various offices around the world, cater to the needs of suppliers, distributors, retailers and end-users in more than 115 countries and across all fertilizer products, acting as a one stop shop on a worldwide basis. Besides the trading and marketing of conventional fertilizer products, it is engaged in impact investing and, through its subsidiary WeGrow, in the distribution of innovative and sustainable fertilizers and additives for technical agriculture applications.

About Brazil Potash

Brazil Potash (NYSE-American: GRO) (www.brazilpotash.com) is developing Brazil’s largest potash project that will supply sustainable fertilizers to one of the world’s largest agricultural exporters. Brazil is critical for global food security as the country has amongst the highest amounts of fresh water, arable land, and an ideal climate for year-round crop growth but is vulnerable as it imports over 95% of its potash fertilizer despite having what is anticipated to be one of the world’s largest undeveloped potash basins in its own backyard. The potash produced will be transported primarily using low-cost river barges on an inland river system in partnership with Amaggi (www.amaggi.com.br), one of the largest farmers and logistical operators of agricultural products in Brazil. With initial planned annual potash production of 2.4 million tons per year, Brazil Potash’s management believes it could potentially supply approximately 17% of the growing potash demand in Brazil with future plans to double output. Management anticipates 100% of Brazil Potash’s production will be sold domestically to reduce Brazil’s reliance on potash imports while concurrently mitigating approximately 1.4 million tons per year of GHG emissions.

Cautionary Note Regarding Forward-Looking Statements

This press release includes forward-looking statements, which are statements that are not historical facts. Words such as “expects”, “anticipates” and “intends” or similar expressions are intended to identify forward-looking statements. Such forward-looking statements, including statements relating to the MOU and the potential benefits of a definitive offtake agreement, are subject to risks and uncertainties, many of which are beyond the control of the Company, including those described in the “Risk Factors” section of the Company’s registration statement on Form F-1, as amended, for the IPO filed with the SEC and the supplemented PREP prospectus filed in each of the provinces and territories of Canada, other than Québec. Readers are cautioned not to place undue reliance on any of these forward-looking statements. These forward-looking statements speak only as of the date hereof. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based, unless required by law.

Contact:

Brazil Potash Investor Relations
info@brazilpotash.com

FAQ

What is the size of Brazil Potash's (GRO) new offtake agreement with Keytrade AG?

Brazil Potash has signed an MOU with Keytrade AG for potential offtake of up to one million tons of potash per year from its Autazes Potash Project.

How much of Brazil Potash's (GRO) planned production capacity is now covered by offtake agreements?

With the Keytrade AG MOU and existing AMAGGI agreement, Brazil Potash has secured potential commitments for approximately 1.5 million tons out of its planned 2.4 million tons of annual production capacity.

What is the total planned annual production capacity for Brazil Potash's (GRO) Autazes Project?

Brazil Potash's Autazes Project has a planned annual potash production capacity of 2.4 million tons.

Who are Brazil Potash's (GRO) major offtake partners as of January 2024?

Brazil Potash's major offtake partners include Keytrade AG and AMAGGI, with combined potential commitments of approximately 1.5 million tons annually.