Key Takeaways
- Itafos has amended its sulfuric acid supply agreement with Rio Tinto's Kennecott mine in Utah, extending a supply relationship that has supported the company's Conda, Idaho phosphate facility for more than three decades.
- The amended agreement runs through December 31, 2029, with the reference index price switching from the Vancouver Index to the Tampa Index from May 1, 2026, and an adjusted sulfuric acid price designed to reduce Itafos' exposure to sulfur price volatility.
- Conda has historically sourced approximately 60% of its sulfuric acid requirements from Rio Tinto, and similar volumes are expected to be purchased under the amended agreement, with additional flexibility negotiated for incremental supply subject to availability.
- Sulfuric acid is a primary raw material for Itafos' phosphate products manufactured at Conda; the amendment is intended to stabilise input costs and support production consistency for U.S. farmers following significant sulfur price volatility over the past four years.
- After December 31, 2029, Itafos expects to continue purchasing sulfuric acid from Rio Tinto, reflecting the long-term, mutually beneficial nature of the supply relationship between the two companies.
Itafos Inc. (TSX-V: IFOS; OTCQX: ITFS) has announced an amendment to its sulfuric acid supply contract with Rio Tinto, continuing its long-standing supply relationship with Kennecott, Rio Tinto's U.S. copper operation in Utah. The amended agreement extends through December 31, 2029 and introduces pricing and volume modifications designed to reduce Itafos' exposure to sulfur price volatility while maintaining supply of a critical raw material for its phosphate production at the Conda, Idaho facility.
Itafos and Rio Tinto: Amendment Terms
Under the amended Sulfuric Acid Supply Agreement, the reference index price will transition from the Vancouver Index to the Tampa Index effective May 1, 2026, through December 31, 2029. The parties have agreed to an adjusted sulfuric acid price through the same period to address the significant price volatility of sulfur experienced over the past four years. Additional modifications around delivered volumes have been negotiated to provide greater flexibility for incremental supply, subject to availability at the Kennecott mine. Conda has historically sourced approximately 60% of its sulfuric acid requirements from Rio Tinto, and similar volumes are expected under the amended terms.
“The amended contract will allow us to maintain supply of a vital input to our production process while decreasing our exposure to volatility in commodity prices. Rio Tinto has been a reliable supplier to the Conda plant for over three decades, and we are pleased to continue this relationship on terms that are mutually beneficial to both parties,” said David Delaney, Chief Executive Officer of Itafos.
Strategic Importance for U.S. Phosphate Production
Sulfuric acid is a primary raw material in the production of phosphate fertilizers at the Conda facility, making supply continuity and price stability directly relevant to Itafos' ability to serve U.S. agricultural markets. The amendment is structured to promote long-term value for both the U.S. farming and mining industries by aligning supply costs with a more stable pricing benchmark and extending volume flexibility through the end of the decade.
“This amended agreement reflects the strength of our long-standing partnership and our shared commitment to reliable supply for the U.S. agriculture sector. Through close collaboration, we are advancing solutions that strengthen domestic resiliency for American farmers while supporting the broader farming community to help keep crop yields strong and supply as consistent as possible,” said Nate Foster, Managing Director of Rio Tinto Kennecott.
Itafos and Rio Tinto's Long-Term Outlook
Beyond December 31, 2029, Itafos expects to continue purchasing sulfuric acid from Rio Tinto, reflecting the durability of a commercial relationship that spans more than 30 years of supply to the Conda plant. The amendment reinforces both parties' commitment to supporting the domestic U.S. phosphate supply chain as demand for fertilizer inputs remains a strategic priority for American agricultural production.
