Sirius raises £43m for work on its huge Yorkshire mine

Graduate trainee David Warburton
Graduate trainee David Warburton
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THE company behind plans for a potash mine in a Yorkshire national park has raised £43m in capital through a share placing, it was revealed last night.

Sirius Minerals said that the cash raised would support work on the York Potash Project, which it claims will create thousands of jobs and provide a shot in the arm for North Yorkshire’s economy.

Together with the company’s existing cash resources of £10m, the net proceeds will be used to complete a feasibility study, and fund work to support the project’s approval applications.

The proceeds will also be used to cover other project expenditure, including land options, sales and marketing activities, crop studies and general corporate overheads.

Chris Fraser, the managing director and chief executive of Sirius, said after the market closed last night: “The £43m capital raising today has been a great success and endorsement of our strategy and the York Potash Project. With broad support from existing and new shareholders in the UK and around the world, this oversubscribed and upsized raising will provide funding for the company’s definitive feasibility study and flexibility to accelerate detailed engineering and design work for the project.

“The addition of the warrants provides the participating investors with increased exposure to the York Potash Project and, on full exercise of the warrants, provides the company with an additional £32m of funding following approval of the mine being granted.”

Earlier in the day, Sirius had said it hoped to raise a minimum of £30m through the placing.

Last month, Sirius unveiled proposals for a new underground pipeline to allay concerns over the controversial scheme’s impact on the environment.

York Potash announced it will replace a previous pipeline scheme for carrying polyhalite between the mine earmarked for farmland in the North York Moors National Park and port operations in Teesside with the underground mineral transport system. York Potash announced last year that the scheme had been delayed to ensure environmental information for the project – including the proposed mine, pipeline, materials-handling plant and port – was available at the same time.

Mr Fraser, the managing director of York Potash’s parent company, Sirius, said last month: “The mineral transport system will use proven mining technology, minimising our impact at the surface and completely removing the need for any construction in designated and protected habitats while also reducing the number of buildings at our mine site.”

Concerns had been voiced over initial plans to transport potash, a key component of fertiliser, through some of Britain’s 
most sensitive protected environments.

York Potash, which is hoping to exploit one of the world’s most extensive seams of the mineral, had admitted the route ran across or near four Sites of Special Scientific Interest (SSSIs). The mineral transport system is expected to remove direct construction from sites including SSSIs and protected moorlands.

The mine has been hailed as a vital development for North Yorkshire’s economy, but the project has been beset by delays.

Sirius Minerals is due to submit a new planning application to the park authority later this year.

In January, Sirius said a deal to sell at least 500,000 tonnes of polyhalite a year to a US company had bumped up sales commitments to 96 per cent at phase 1 of its potash project in North Yorkshire.

The miner did not identify the buyer, but said it was a Fortune 500 agri-business.

Analysts said the deal was the company’s most significant agreement of its kind to date.