Anglo American commits to saving £2.5bn potash mine project

Aaron Morby 3 years ago
Share

Mining giant Anglo American is now set to save Yorkshire’s £2.5bn potash mine construction project.

The Woodsmith mine project involves sinking two 1.5km shafts below a national park on the North York Moors to access a huge deposit of polyhalite, a mineral that can be used as fertiliser
The Woodsmith mine project involves sinking two 1.5km shafts below a national park on the North York Moors to access a huge deposit of polyhalite, a mineral that can be used as fertiliser

Project developer Sirius Minerals is recommending shareholders accept a 5.5p a share offer from Anglo to buy the polyhalite fertiliser project for £400m.

Sirius Minerals has warned shareholders, who stand to suffer a significant loss, that the firm will fall into administration if the offer is not accepted.

Anglo American has committed to salvaging the construction project spending around £230m a year for the next two years to keep construction going.

This will allow main tunnelling contractor Strabag, civils specialist P J Carey and mineshaft contractor DMC Mining Services to continue working on the vast scheme.

The full scheme will require £2.5bn to complete, which Anglo is committed to delivering, subject to a development review over the next two years.

So far around £850m has been spent on the scheme.

Sirius Minerals was forced to scale-back construction on the project last November after failing to secure further major funding for the vast construction project.

Failure to raise the $500m needed for the next major phase of construction saw shares in the firm crash 60% to 4p late last year.

Hundreds of workers were laid off at the North York moors potash mine site although Austrian tunnelling specialist Strabag, which has the contract for the three main 23-mile tunnel drives to transport excavated material to the coast, continued construction on one of its drives.

Mark Cutifani, Chief Executive of Anglo American, said: “Anglo American’s recommended offer provides greater certainty for Sirius’ shareholders, employees and wider stakeholders, while bringing the prospects for the development of this potential Tier 1 Project closer to reality.

“We intend to bring Anglo American’s financial, technical and product marketing resources and capabilities to the development of the project, which of course would be expected to unlock a significant and sustained associated employment and economic stimulus for the local area.”

Russell Scrimshaw, Chairman of Sirius, said: “We also recognise the returns that this offer would represent are not what either our shareholders or the Sirius Board had previously hoped for.

“We regret that we are not able to deliver on our long-term goal of Sirius being able to deliver the project into production, although we assure all stakeholders that the team has worked tirelessly and diligently over the last nine years to try and achieve that.”

He added: “We now face a stark choice. If the Acquisition is not approved by Shareholders and does not complete there is a high probability that the business could be placed into administration or liquidation within weeks thereafter.”

 

 

Latest news

Eric Wright wins tricky £52m Liverpool transformation

Contractor working with engineers at Ridge and Partners on "challenging" Stanley Lock Flight site
1 day ago

Investment giant buys Bristol M&E contractor

RDCP Infrastructure acquires Avon Combined Electrical Services
1 day ago

Demolition start for £50m Farnworth town centre rebuild

Caddick Construction is tipped for main works due to start in the spring
1 day ago

L&G Modular strikes deal to build 1,000 affordable homes

Modular homes business teams up with Hampshire's Vivid housing association
1 day ago

Former Erith operations director joins John F Hunt

Scott Exell named new operations director at demolition specialist John F Hunt
2 days ago

Green light for £135m Leeds twin tower resi scheme

Construction to start in New Year on 500 build-to-rent apartments
2 days ago

Mace hits 1m tonnes carbon saving target for clients

Present work pipeline betters 2026 carbon emission saving target
2 days ago

Plans in for £40m surf park at former Kent colliery

Seahive surf lagoon and health resort will be built near Deal
2 days ago

Crushed demolition worker vows to return to industry

Shannon Brasier hoping to return to construction following horror accident
2 days ago

Mount Anvil to start 900-home North London estate rebuild

Planning approval paves way for Barnsbury Estate rebuild in Islington
2 days ago

Green light for major laboratory campus in Cambridge

Developer BioMed to tender first building on 600,000 sq ft lab complex in the New Year
2 days ago

Belfast firm signs the biggest work deal yet under Project Gigabit

Fibrus to hook-up rural Cumbria to lightning-fast broadband under £108m deal
2 days ago

McLaren wins Leeds logistics park contract

Work to start imminently on warehouse complex for Firethorn Trust
3 days ago

Work restarts on £683m waste power plant after site death

Construction suspended for a week of investigations following fatality
3 days ago

Demolition starts on £135m Wigan Galleries scheme

Contractor BCEGI starts work on project to redevelop Wigan town centre
3 days ago

Amey CEO to step down following private equity buyout

Amanda Fisher to leave once business is transferred to new owners
3 days ago

New body set up to vet plant operator card schemes

Contractor trades bodies unite to tackle competency concerns over plant operator skills cards
3 days ago

Kier leads switch to hybrid battery generators

Battery units work alongside smaller generators cutting run times by nearly 60%
3 days ago

Plans in for first Leeds co-living scheme

Watkin Jones submits plan to convert old Direct Line HQ into 230 studio flats
3 days ago

Demolition worker crushed by excavator

Court hears 20-year-old woman was left with "life changing injuries"
4 days ago

Government pays £700m for 50% stake in Sizewell C

New body, Great British Nuclear, will be set up to develop pipeline of nuclear projects
4 days ago

Costain wins Heathrow Airport asset renewal deal

Firm takes early contractor involvement role in Terminal 2 baggage handling upgrade
4 days ago

Worker killed on £683m waste power plant site

Fatal collision involving heavy goods vehicle on giant north London site
5 days ago

HS2 JV shifts four Wembley Stadiums of earth in record time

EKFB team digs and hauls 15 million cu m of muck in 20 months
4 days ago

Milestone wins £300m Wiltshire highways upkeep

Ringway will hand over to Milestone in March next year
4 days ago

Low-risk business model helps Renew post record results

Renew reveals latest acquisition with £15.6m purchase of water specialist Enisca
4 days ago

London Albert Embankment hotel towers approved

Two separate hotels rising to 26 and 29 storeys approved
4 days ago

Keltbray names new director of strategic engineering

Tim Lohmann takes up newly-formed role to drive innovative engineering solutions
4 days ago

Go-ahead for £200m lithium refinery on Teesside

Work to start next year on Europe's first lithium hydroxide processing plant
5 days ago

HS2 agency workers paid the wrong wages

Payroll software problems leave workers out of pocket
5 days ago

Contractor services