Further cheer for Sirius as it signs port deal

Sirius has signed a deal for port and ship loading services at the Redcar Bulk Terminal
Sirius has signed a deal for port and ship loading services at the Redcar Bulk Terminal
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Sirius Minerals, the firm behind the £3.2bn North Yorkshire polyhalite mine, has signed a deal for port and ship loading services at the Redcar Bulk Terminal.

Analysts welcomed the news as it means the company’s Yorkshire fertiliser mine will face reduced construction risk and lower capital requirements. Sirius said it will also ​deliver "tremendous" economic benefits for the region.

Redcar ​will provide ​Sirius with ​port and ship loading services for up to 10 million tonnes ​of polyhalite a year.

Redcar and Sirius have also ​signed a long​ ​term lease for land adjacent to the ​c​ompany’s existing port facilities for finished product storage facilities.

Chris Fraser, ​m​anaging ​d​irector and CEO of Sirius, ​said:​ ​“We are pleased to enter into this arrangement which reduces the complexity of our construction programme and ultimately helps to simplify our stage two financing plan which is being finalised over the coming months.

“By working with a local partner, we can develop our project and also deliver benefits to an existing established business in the Tees Valley. The ​Redcar Bulk Terminal​ facility has been under​-​utilised since the closure of the steel works and this agreement will ultimately help us ​​deliver tremendous economic benefits for the region.”

Garry O’Malley, ​​Redcar Bulk Termina​l​’s ​g​eneral ​m​anager, said:​ ​“This is excellent news for Teesside and we’re delighted to be working with Sirius Minerals on a project of such regional magnitude.

“It’s another significant step forward in the continued resurgence of Redcar Bulk Terminal and demonstrates the integral role we’re playing in the regeneration of the South Tees site.”

Redcar Bulk Terminal​’s port facility is located adjacent to the ​c​ompany’s Bran Sands site and is also a deep-water terminal capable of handling up to Capesize vessels.

R​edcar has historically operated as a bulk import terminal ​for the adjacent steel works that closed in 2015.

Following the closure of the steelworks, ​Redcar Bulk Terminal continued to operate, invest and grow into a multi-model terminal attracting a number of new customers and products.

However, in order to handle ​polyhalite​ exports, some capital expenditure, predominantly ship loaders and conveyors, is required to facilitate the loading of ships with POLY4. ​POLY4 is the ​name given to the ​natural fertiliser ​which​ be produced from ​Sirius'​ Woodsmith mine in North Yorkshire.​

Sirius will procure and install the necessary ship loading equipment and systems onto the ​​Redcar Bulk Terminal​ facility.

The terminal will operate and maintain the new equipment installed and owned by Sirius. The services are to be provided for a period of ​10​ years from first shipment of POLY4.

From the third year of production​, Sirius will guarantee certain payments to ​​Redcar Bulk Terminal​​ for a minimum volume of materials handling.

Sirius said the new deal will provide flexibility​ through the u​se of existing port infrastructure which ​will ​lead to capital expenditure savings and reduces construction risk during the​ construction programme.

Sirius has retained the right to develop its Bran Sands facility at a future date, which it plan​s​ to do in due course.