Sirius Minerals seeks $600m in investment for flagship project
Sirius Minerals have released revised plans for financing its North Yorkshire potash mine, the largest project of its type in the world.
After placing the project under review in September, the London-listed group said that it was seeking $600m (£468.9m) in funding from investors for the project.
Read more: Sirius boss buys shares after project put on review
In order to achieve a production capacity of 10 million tonnes per annum, the project will require $2.5m in capital expenditure.
Commenting on the update, Neil Wilson, chief markets analyst for Markets.com, said that the plan would “require significantly less capital than the previous incarnation.”
He added: “A possible way out of the mire, but needs to be picked over in more detail.”
The mine will consist of two 1.5km shafts drilled below the North York Moors National Park to access the world’s largest deposit of polyhalite, which is used in fertilisers.
A 40km tunnel will then transport the ore onward to a port on Teeside.
Group managing director and chief executive Chris Fraser welcomed the approach, saying:
“The value of Sirius is unlocked by reaching production and delivering POLY4 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.”
Shares in the company rose 13.5 per cent in early trading, to 3.63p.
In September the project was thrown into jeopardy when Sirius Minerals was forced to scrap a $500m bond sale and pay back $400m from a separate sale to investors.
Chris Fraser said that an uncertain market, including concerns over Brexit, had impacted the company’s ability to raise the money it needed.
Read more: Hundreds of jobs in peril after Sirius project under review
Woodsmith, which is the largest mine to be developed in the UK for a generation, is expected to provide 1,200 jobs.
Sirius had asked the government to guarantee $1bn in bonds. The decision to pull out was met with fierce criticism by unions such as Unite for putting hundreds of jobs at risk in a region “crying out” for them.
Main image credit: Getty