Work at potash mine to be delayed to reduce costs and financial risk
Fertiliser development company Sirius Minerals has today published a review of its North Yorkshire polyhalite mine project, following the collapse of its $500m/£390m financing plan in September.
The listed Scarborough-based firm said it will now seek to raise an initial US $600m/£469m by the end of March 2020 to fund the construction of the mineshafts and first section of tunnel only.
The remaining infrastructure, comprising the rest of the tunnel, and processing / shipping facilities at Teesside, will be deferred for between 12 and 24 months, and financed separately (up to $2.5bn/£1.9bn).
The company said it believes this approach will reduce costs and mitigate financing risk.
It is already in discussions with potential strategic partners and debt investors to raise the US$600m required for the initial scope, adding that it will update the market when appropriate.
Chris Fraser, managing director and CEO of Sirius, said: “The value of Sirius is unlocked by reaching production and delivering POLY4 (polyhalite) to our customers around the world.
“This approach allows us to achieve that with less upfront capital while retaining the significant return opportunity it presents for our shareholders and stakeholders.
“I would like to thank our employees, contractors and partners for their continued focus and commitment, and recognise that the progress achieved on the ground in recent months remains a source of huge inspiration for the whole team.”
Sirius wants to extract polyhalite, a form of potash containing potassium, sulphur, magnesium and calcium. The product would be used by farmers to help improve crop yields.
Fraser said Sirius had been unable to deliver its financing plan due to “ongoing poor bond market conditions”.
