Sirius Minerals suspends proposed offer of $500m of senior secured notes due to market conditions

Sirius Minerals, the company behind the £3.2bn polyhalite mine near Whitby, has decided to suspend the proposed offer by its wholly owned subsidiary of $500 million of senior secured notes due to market conditions.

The Sirius Minerals site near Whitby

The company said it intends to revisit the market when conditions have improved later this quarter. The proposed offer of senior secured notes had been announced last month.

Sirius did not provide any further comment. However, The Yorkshire Post understands the proposed offer relates to high yield bonds and the company has decided to suspend it due to the collapse of the markets in recent days, which is partly due to the trade war between the US and China.

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Sirius still has cash to develop the scheme and intends to go to the market to raise the rest of the money when conditions improve.

Last month Sirius Minerals said it was on track to achieve its first polyhalite production in 2021 and construction of its North Yorkshire polyhalite project remains on schedule.

In July, the group said construction was advancing well and the company remained on target to achieve first polyhalite and commercial production on time and in line with its cost schedule.

Sirius said it is on target to complete the construction of its foreshafts by the year end to enable commencement of excavation of the main shaft.

The excavation of the 35-metre diameter service shaft foreshaft to 45 metres was completed in the first quarter of 2019, enabling work to start on the the excavation of the inner-main shaft.

The main shaft has now been excavated to 85 metres below ground level, using conventional excavation techniques.

Sirius said the SBR for the production shaft is currently being erected in Germany and will be undertaking various cutting optimisation tests prior to being dismantled and shipped to the Woodsmith Mine in North Yorkshire.

Sirius also signed a major supply agreement with Indian Farmers Fertilisers Cooperative (IFFCO) in June.

IFFCO’s primary business is the manufacturing and marketing of fertilisers and it is in the top 100 of India’s Fortune 500 group of companies.

It is one of the largest co-operative societies in the world, with more than 36,000 member cooperatives and access to 55 million Indian farmers.

The agreement is for an 11-year term, with a 10-year extension option by mutual agreement. Volumes will ramp up to one million tonnes per annum in year eight, with an option to increase this to 1.25 million tonnes per annum.

India is one of the top three fertiliser markets in the world with a total nutrient consumption of around 30 million tonnes per annum. The demand for fertilisers has been growing steadily due to increasing demand for food as the country’s population increases.

With the need to increase productivity per hectare, Sirius said multi-nutrient products like its POLY4 are well suited to Indian agriculture and soils.