Potash project proves fertile ground for region’s investors

The mine – known as the York Potash Project – was given the go-ahead at a special planning meeting in Whitby in June and the Government has ruled out holding a public inquiry into the proposals.

According to Sirius, the mine will directly employ 1,070 people and also support a further 1,000 jobs indirectly.

The mine promises to be far more than a conventional potash mine.

The site is jam-packed with polyhalite, a superior, multi-nutrient form of potash, which can massively increase crop yields.

It will also be much cheaper to use than rivals’ potash as when polyhalite is used, 50 per cent less potassium oxide is needed to grow crops. Sirius ​said the mine has the world’s largest and highest grade deposit of polyhalite, which contains potassium, sulphur, magnesium and calcium.

It has secured 3.1 million tonnes per annum of off take agreements, with an additional 4.8 million tonnes per annum in other forms of commitments.

The company hopes to complete the definitive feasibility study into the mine over the next few months.

Figures released by Sirius show that in February this year, 5,518 of the company’s shareholders were from Yorkshire and the Humber, which is around 20 per cent of the overall total. Gareth Edmunds, Sirius Minerals’ external affairs director, said he was pleased that such a large number of Yorkshire-based investors had supported Sirius.

“There’s a huge amount of support. We have always acknowledged that and we are very grateful. They share in our success.”

Analysts believe the mine could be in production for more than 100 years, securing jobs in an area that needs investment.

North Yorkshire needs to develop jobs in other areas that are not dependent on tourism.

Analyst Paul Smith at house broker WH Ireland said: “Sirius has made great efforts to accommodate any environmental concerns and the proposed mine will have a very small footprint in the North York Moors National Park.”

In a bid to appease local concerns Sirius will build a 36.5km tunnel from the mine site to transport the crushed ore to the plant and port at Teesside.

Analysts said the tunnel will keep disruption at the surface to a minimum within the National Park.

Now that the permits are out of the way – pending a decision on the Port Facility in mid-2016 – Mr Smith anticipates first production by 2019, subject to funding.

“Sirius has a permitted project in a stable democratic country to produce a non-toxic product with minimal processing,” said Mr Smith.

“It benefits from substantial local and regional support and has developed a plan which should prove to be a case example of how to develop a mine in an environmentally sustainable way.”

The main hurdle now facing the project is funding.

Sirius has said it will try to fund as much as possible by debt in order to avoid shareholder dilution by issuing new shares.

So far Chris Fraser, the managing director and CEO of Sirius, has proved himself to be a tough cookie and he has already achieved what many thought would be impossible.

The company continues to rake in big name customers and securing the funding should not prove difficult for a man with his experience in this field.

WH Ireland said in a note: “The economic returns from this project could be significant and we confirm our ‘buy’ recommendation and target price of 50p a share.”

Bearing in mind the share price is hovering at around 18p, this would be a major windfall for Sirius’s 5,000 loyal Yorkshire shareholders.