MINING bosses say a Government decision to fund a rival's growth will not jeopardise their proposed £1.5bn development.

Sirius Minerals says it remains fully committed to the York Potash Project, which could create about 1,000 jobs by extracting million of tonnes of polyhalite from under the North York Moors National Park.

However, the Government has awarded £4.9m from its Regional Growth Fund to Cleveland Potash, in Boulby, east Cleveland, to support £38m work on mining and processing the fertiliser mineral.

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Last year, Cleveland Potash told The Northern Echo polyhalite had no place in the global fertiliser market.

Bosses say the new development will include underground equipment and surface facilities to crush and screen material, as well as upgraded rail and dock facilities.

Cleveland Potash, which employs about 1,100 workers, says it will create 125 direct jobs and about 265 supply chain posts.

Chris Fraser, Sirius' chief executive, said ministers' support reflected the increasing importance of polyhalite.

He said: “We have led the charge in marketing polyhalite around the world with sales commitments already in place across four continents and a global programme covering major crops in multiple scientific studies.

“We are delighted with the Government recognition of the importance of polyhalite.

“It is more good news for job creation in the region, which can play a leading role in helping address global food security issues.”

Phil Baines, Cleveland Potash's general manager, said the company had access to more than a billion tonnes of polyhalite, which he said would support the mine's long-term future.

However, a year ago, the firm said it doubted the impact of polyhalite, claiming its main product, muriate of potash, was recognised as the premier source of potassium fertiliser.

It said: “We are unable to see how millions of tonnes of polyhalite will be accommodated by the world fertiliser market.

“There are also questions whether it would be possible to make much inroad into the market currently dominated by muriate.

“A farmer using polyhalite would have to spread four times more than muriate to achieve equivalent potassium fertilisation levels.”

Sirius already has agreements to send millions of tonnes of polyhalite to companies in China, Latin America, the US and Africa.

It hopes to submit the plans for the mine, near Whitby, in July.