North Yorkshire mine "on time and on budget"

The Red Arrows flying over Sirius Minerals exploration drilling rig at its North Yorkshire polyhalite project

The firm said there had been a two month delay in excavating the Woodsmith mine due to bad weather, but it is confident it can make up the lost time. Production is due to start in 2021 and the group has a budget of £2.9bn.

Sirius said that diaphragm walling activities (the process by which mud is replaced by concrete) are around two months behind schedule following delays in commissioning the equipment and adverse weather conditions. The company said it is confident that this small loss of time will be recovered over the remainder of the project schedule.

Sirius said the application for “minor material“ amendments to the original planning application has been unanimously approved by the local planning authority. This approval covered changes to the foreshaft and surface layout designs at the Woodsmith site.

The firm said the site preparation scope of work at the Woodsmith and Lockwood Beck sites is now substantially complete. A number of minor activities remain ongoing and will be completed in 2018. .

Analyst Yuen Low at Shore Capital said: “For us, the key takeaways from today’s quarterly update are that the paradigm-shifting North Yorkshire polyhalite project remains on time and on budget and that Sirius has generally achieved what it had set out to do.“

Mr Low said that whilst the company has made some notable achievements, such as securing a take-or-pay off-take agreement with Wilmar and obtaining Section 73 approval from the North York Moors National Park for the revised shaft construction plans, there are potential concerns for investors.

He said these include the signing of the shaft sinking contract, which Sirius had hoped to have achieved by the end of 2017 but it currently remains unsigned.

“This is not yet causing scheduling issues, but Sirius is understandably keen to have this executed as soon as possible to avoid any potential negative impact on the critical path,” said Mr Low.

Sirius said it is still working to finalise the shaft sinking contract.

“This activity is the key focus of management’s attention and all avenues are being explored to ensure a shaft sinking contract will be executed as soon as possible and the impact on the overall construction programme is minimised,” the firm said.