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euRoPe

Britain’s biggest mining project

in peril

irius Minerals scrapped
Sa plan to raise $US500
million in a bond sale on
September 17, delaying
a project to mine for ferti-
liser under a national park
in northern England and
halving the value of its
shares.
The company had al-
ready suspended the
bond issue in August.
Sirius blamed market
conditions aggravated by
uncertainty over Britain’s
departure from the Euro-
pean Union for its failure
to secure funding.
Sirius said on Septem-
ber 17 the Government
had turned down a re-
newed request for backing
in August. The company
said it would conduct a six-
month review to work out cost savings and The development of the North Yorkshire polyhalite project has the potential to deliver
would slow development of the project. up to 1,200 jobs to one of Britain’s most economically depressed regions
“This is the most prudent decision to
give the company the time necessary to The Unite union urged the Government pounds during half a century of mining.
restructure its plans to move the project to provide backing. “This is a vital project The company said it had £180 million
forward,” chief executive Chris Fraser said, for a region which is crying out for new in cash at the end of August, which would
adding that one option was to seek “a ma- investment and jobs,” national officer Ian help it explore options.
jor strategic partner”. Woodland said. The company needed to issue a bond of
The company said 1,200 jobs involved Many local people have invested in at least $US500 million to gain full access
in developing the project would be lost if it the plan to tunnel under England’s North to a $US2.5 billion revolving credit facility
failed, but Fraser told a conference call he York Moors to exploit what Sirius says is from JP Morgan Chase. JP Morgan Chase
was confident it could be saved. the world’s largest deposit of polyhalite, a declined to comment.
The plan would create Britain’s biggest multi-nutrient fertiliser. Sirius also repeatedly sought govern-
mine and add jobs to a part of the country Polyhalite is meant to be superior to the ment help and in August had asked for
hit by the decline of heavy industry. traditional fertiliser ingredient potash. But government backing to enable the issu-
some potential investors ance of up to $US1 billion in guaranteed
are concerned the market bonds.
for polyhalite is not well es- A spokesman for Prime Minister Boris
tablished. Johnson said any request for financing had
Until now, the world’s to weigh “the potential of a project against
only producer of polyhalite the need to protect taxpayers’ money”.
is Israel’s ICL, which has a Humphrey Knight, potash analyst at
mine near Sirius’ project, business intelligence company CRU, said
and markets it under its the project faced many risks, “not least, the
Polysulphate brand. market for polyhalite remains very small”.
Although not in produc- Sirius reported an operating loss of
tion, Sirius has offtake £14.3 million for the six months ended
contracts with customers in June 30 versus a loss of £10.8 million a
the United States, Europe, year earlier.
Brazil, India and Africa. It
has said it has the poten- – Barbara Lewis and Noor Zainab
tial to generate billions of Hussain, Reuters
Investors are concerned markets for Sirius’ polyhalite
product are untested
aUSTRaLIa’S PaYDIRT OCTOBeR 2019 Page 113