Papyrus Australia (ASX: PPY) Announces Transformative $4.2 Million Mining Contract

In a significant ASX announcement, Papyrus Australia Limited (ASX: PPY) has secured a transformative mining contract with TBS Mining Solutions Pty Ltd, marking the company’s official transition from research and development into commercial revenue generation. The Papyrus TBS Mining Contract, valued at approximately $4.2 million over an initial 3.5-year term, grants Papyrus exclusive global manufacturing rights to produce biodegradable Collar Keeper® products for drilling and blasting operations in the mining sector.

This definitive agreement supersedes the binding term sheet announced on 20 August 2025 and represents the first substantial revenue contract following Papyrus’s strategic business reset. Supply is anticipated to commence in Q4 FY26, contingent upon achieving four critical project milestones between now and June 2026. Furthermore, the contract includes a three-year extension option, potentially extending the partnership well beyond the initial supply term.

The exclusive production arrangement eliminates competition and positions Papyrus as the sole global supplier of biodegradable collar keeping solutions to TBS. This market positioning validates years of development work on the company’s proprietary plantation waste conversion technology whilst opening access to the substantial mining equipment market.

What Makes the Papyrus TBS Mining Contract Commercially Significant?

The contract with TBS Mining Solutions represents far more than a simple supply agreement—it marks the formal commercialisation of breakthrough sustainable materials technology. By securing exclusive global manufacturing rights, Papyrus becomes the only producer of biodegradable Collar Keeper® products for TBS, creating a defendable market position in an industry segment valued at millions annually.

The contract value of circa $4.2 million represents minimum contracted volumes over the initial 3.5-year supply term. However, actual revenue could substantially exceed this baseline figure depending on volume uptake from TBS Mining Solutions and its customer base. This minimum volume commitment provides revenue visibility and a financial foundation for scaling operations.

Executive Chair Al Jawhari emphasised the significance: “This definitive agreement with TBS Mining Solutions marks the commercial launch of Papyrus’s technology platform. Together with Aquirian, we are delivering an innovative, biodegradable solution that meets the performance requirements of the mining sector while advancing our mission to provide sustainable alternatives to traditional materials.”

The agreement validates the commercial viability of Papyrus’s plantation waste conversion technology platform. Entry into the mining sector via drilling and blasting applications demonstrates that materials produced from agricultural waste can meet demanding industrial specifications, establishing credibility for broader technology deployment across multiple sectors.

TBS Mining Solutions, a wholly owned subsidiary of Aquirian Limited (ASX: AQN), is a mining services company delivering drill and blast solutions worldwide. Its adoption of Papyrus’s biodegradable technology signals industry acceptance of sustainable alternatives, particularly as mining operators face increasing pressure to reduce environmental impact and strengthen ESG credentials.

How Does Biodegradable Collar Keeper Technology Address Mining Industry Challenges?

In mining drilling and blasting operations, collar keepers are specialised devices used to secure explosive charges in blast holes, ensuring precise positioning for controlled detonation. These devices must maintain structural integrity during drilling and withstand the significant forces involved in blasting procedures—demands traditionally met using plastic materials.

Traditional collar keepers create persistent environmental challenges, as they remain as waste after blasting, requiring costly retrieval or creating contamination. This adds operational costs and environmental burden to mining activities.

Papyrus’s biodegradable collar keepers perform the identical structural function but break down naturally after use. This eliminates waste retrieval requirements and reduces environmental impact without compromising operational performance. The technology transforms banana plantation waste into high-quality, fibre-based materials suitable for demanding industrial applications.

The resulting material must be simultaneously robust and biodegradable, satisfying exacting requirements for structural integrity during operations and natural degradation afterward. This balance represents significant technical innovation. The product is designed as a drop-in replacement, requiring no operational changes from mining customers, which reduces adoption barriers.

What Are the Key Milestones for the Papyrus TBS Mining Contract?

This investor update confirms that revenue commencement is contingent on Papyrus achieving critical project milestones, with Year 1 contracted volumes scheduled to begin in June 2026. This structure ensures TBS receives validated products whilst providing Papyrus with clear development targets.

The agreement contains carefully structured milestones that must be achieved before commercial supply commences. Near-term milestones include executing the contract for board production by 28 February 2026, delivering 200 product samples by 31 March 2026, and completing testing and acceptance procedures by 30 April 2026.

The sample delivery phase is particularly significant, as it enables product validation under real-world conditions. Following successful testing, the final milestone involves delivering the balance of initial production by 31 May 2026 before Year 1 contracted volumes commence on 30 June 2026.

The contract contains termination provisions that create accountability. If Papyrus does not achieve Milestone 1 within 60 days of the target date, or Milestones 2 or 3 within 90 days, TBS has the option to terminate the agreement.

How Will This Agreement Generate Value?

The successful execution of this contract is poised to generate significant value for Papyrus Australia and its shareholders. Firstly, it establishes a predictable, long-term revenue stream, transitioning the company from a pre-revenue R&D entity to a commercial operator.

Secondly, securing a contract in the highly regulated mining sector provides powerful validation of the company’s technology. Proving the material’s performance under such demanding conditions serves as a crucial reference case, potentially accelerating adoption in other industrial sectors such as packaging, construction, and consumer goods.

Finally, the agreement de-risks the company’s commercialisation pathway and provides a clear line of sight to profitability. The minimum volume guarantees offer a stable financial foundation, while the extension option and potential for increased orders present considerable upside potential, supporting long-term growth and investor confidence.

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