£2.5bn Yorkshire potash mine funding deal

Aaron Morby 7 years ago
Share

Fertiliser producer Sirius minerals has put together a funding deal to start construction of a massive potash mine in north Yorkshire.

How mine head site will look at Dove’s Nest Farm near Whitby
How mine head site will look at Dove’s Nest Farm near Whitby

The decision to press ahead with construction is a major success for contractors Murphy and Hochtief who have been involved in front-end engineering the project for several years.

Sirius revealed this morning that it would be launching an underwritten share issue to raise £1bn to fund the initial construction phase of the massive project. Part of the funding package also involves support from Australian mining giant Hancock Prospecting.

The stage 1 funding will cover the direct costs of all site preparation, mine shaft excavations, tunnel caverns, project management and owner costs as well as provide certain contingency funds for the project.

Cash will be released over the first three years after commencement of construction.

A further £1.5bn will be needed two years into initial construction to fund Murphy/Hochtief’s 23-mile tunnelling contract, mine fit-out and harbour facilities at Teesside.

The deal needs to be rubber stamped by Sirius shareholders later this month, but if agreed will pave the way for construction of the vast mining project.

Chris Fraser, Sirius chief executive officer, said: “I am delighted to announce this proposed fully underwritten financing package which – together with our new strategic investor, Hancock, announced last week – provides the comprehensive Stage 1 financing required to start construction of our North Yorkshire polyhalite project.

“This project will create jobs in North Yorkshire and Teesside, and represents a significant business investment in the UK.  

“It’s been a long journey to this point, and we still have some way to go, but I want to thank everyone who has supported the company in its efforts to reach this major milestone. 

“Once we have received shareholder approval, we want to get on with the job of delivering this compelling value proposition, not only for our shareholders but also for the North Yorkshire community.”

Specialist firms within the Thyseen and Redpath group have the job for shaft sinking at the mine site.

The Murphy/Hoctief jv will construct the 6m diameter TB-bored tunnel to transport minerals from the mine head site at Dove’s Nest Farm near Whitby to a portal near the town of Redcar.
York-PotashTBM-strategy

Designed by Arup, the plan is to use five hard rock TBMs, which will be lowered in at four intermediate staging shafts. The starting depth will be around 360m below the surface at the mine head.

Northern Powerhouse Minister Andrew Percy MP said: “Today’s launch of Stage 1 financing for Sirius Minerals’ North Yorkshire polyhalite mining project is a very welcome sign of progress.

“This project has the potential to create over 1,000 jobs, boost growth and generate billions of pounds of exports for the Northern Powerhouse.

“We support their efforts to help make the north a world leader in the multi-nutrient fertiliser industry.

“Already foreign direct investment projects are up nearly a quarter on the previous year and today’s announcement is another vote of confidence in the Northern Powerhouse.”

 

Latest news

Beard expands reach as revenue hits record £179m

Builder start 2024 with healthy head of work
7 hours ago

Race to start for £25m Cardiff twin tower reclad jon

Cardiff council to use SEWCAP to bid Butetown high rise flats revamp
10 hours ago

Gove calls up ‘super-squad’ to clear London planning log-jam

Specialist planning team first to unlock 7,000 homes in Newham and Greenwich
14 hours ago

Permasteelisa in £35m cladding win at St John’s Wood Square

Italian specialist to start work on luxury resi site by the end of this year
16 hours ago

Investor pumps another £30m into low carbon builder

House builder Greencore gets more funding as latest results reveal £4m loss
19 hours ago

800-bed Leeds student and shops scheme approved

Major three-block scheme will replace The Core shopping centre in the city
23 hours ago

Modular homes specialist files administration notice

Lighthouse bosses battle to save the business
24 hours ago

Go-ahead for £175m Birmingham Broad Street tower

Work to start on 47 storey build to rent tower in September
23 hours ago

Erith trading rebounds after lengthy bid-rigging probe

Staff paid £1.5m bonus after year of growth and return to profit
24 hours ago

Balfour and Costain win vast power and carbon capture job

Nine firms to share £4bn Teesside net zero work bonanza
4 days ago

First ‘Great Grid Upgrade’ job goes to MGroup and Murphy

Works to start this summer on £400m Yorkshire GREEN electricity pylon upgrade
4 days ago

London council can no longer police planning applications

Planing row reveals Greenwich officials no longer follow-up to check on developments
4 days ago

Surgo Construction falls into administration

46 jobs lost as historic contractor ceases trading
5 days ago

Mace fresh start date for £90m Natural History Museum hub

Reading project to build store for 28m specimens to start early next year
4 days ago

Competition watchdog probes Barratt Redrow merger

CMA opens investigation into creation of mega house builder
4 days ago

Safety chiefs act to avoid building control crisis

Three-month extension to deadline for professionals to prove their competence
4 days ago

TClarke hits £500m turnover target but profitability slips

Big work-winning year sees order book swell 70% to £943m
4 days ago

Just 10% of £10bn Levelling Up funding spent by councils

Speed of delivering 'shovel-ready' projects fails to meet expectations
4 days ago

Six win £1bn North West & Central railway works deal

Story, Murphy and Amey feature in five-year CP7 framework
4 days ago

Willmott Dixon names new finance chief

James Mackenzie joins from Willmott Dixon's Eco World development JV
4 days ago

Ilke Homes name reappears after £320m collapse

New brand Homespace now owns modular designs after Ilke failure
5 days ago

Second staircase rule costs Vistry £19m

Firm reopens East Midlands timber frame manufacturing plant
5 days ago

Clients urged to get ahead of contractor recovery cycle

T&T says investment decisions must be ‘made not delayed’ for best value
5 days ago

Fife groundworks and plant hirer goes under axing 35 jobs

James Penman (Plant Hire) falls into administration in 50th anniversary year
5 days ago

Smart Motorway Programme Alliance chief to step down

Tony Slater is moving on to take up fresh career challenge
5 days ago

Balfour M25 workers vote for strike in pay row

Maintenance crews to down tools over "meagre" pay offer
6 days ago

Andrew English returns to Skanska as infrastructure boss

Returning director replaces Jonathan Willcock who is off to Costain
6 days ago

Construction back in growth as output rises 1.1% in January

Green shoots of recovery as private housing returns to growth
6 days ago

UK Construction shines in solid year for Balfour Beatty

Operating margin improves to 2.3% at UK construction arm
6 days ago

JJ Rhatigan wins £49m London co-living homes job

Wood Lane project will deliver over 200 flats
6 days ago

Contractor services