The Australian company behind a planned revitalisation of the Nauru phosphate industry says the financially stricken island will benefit in several ways from the deal.
The Australian fertiliser group, Incitec Pivot, is to provide materials and engineering expertise to a new company set up by the Nauruan government to mine for phosphate.
A company manager, Bernard Walshe, says in exchange for a partial upgrade of the island's phosphate facilities, Incitec Pivot will receive about 150 thousand tonnes of phosphate rock annually for two years.
He says it will mean they have access to cheaper phosphate than their current North African supply.
And Mr Walshe says the benefits for Nauru are also significant.
"Firstly they get some revenue, because we will not be taking all of the tonnes, so they get some revenue. Secondly an operating plant give them an better chance of assessing secondary mining possibilities and what comes with that, if they can successfully do that, is also successfully begin the rehabilitation of those areas - as far as we are concerned, it's a real win/win."