MINING bosses have today unveiled an extensive blueprint on a £2 billion vision they say will create thousands of jobs in North Yorkshire and Teesside.
Sirius Minerals have published a definitive feasibility study (DFS) on their York Potash Project, near Whitby.
The company says the scheme, approved by planners last year, will be a world-class development allowing access to the world’s largest and highest grade of polyhalite, a form of potash reputed for delivering strong crop growth.
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VISION: An artist's impression of Sirius Minerals' materials handling site on Teesside
Unveiling the blueprint, Chris Fraser, managing director and CEO of Sirius, said: “The business that is created from this project will sit as a world leader in the fertilizer industry based here in the UK.
"It is expected to have a low operating cost structure, high margins and a very long asset life in one of the most business friendly, stable and dynamic economies in the world.
“In delivering this project we can create thousands of jobs in North Yorkshire and Teesside, deliver billions of pounds of investment to the UK and put the country at the forefront of the multi-nutrient fertilizer industry.
“The DFS represents the blueprint to bring this global fertilizer business into large-scale production and successfully delivers on the core strategic vision of the Company to become a major low cost producer of multi-nutrient fertilizers."
Mr Fraser said the company was working its partners to arrange financing for the project, adding: "This process is expected to take a number of months but certain parts of the early construction activity, such as highways upgrades, are commencing soon to facilitate an efficient start of the project."
The feasability study concludes that the mine will have a production capacity of 20 million tonnes per annum (Mtpa) with initial installed capacity of 10Mtpa. Other findings include:
- Project net present value (“NPV”) of US$15 billion today at a 10% discount rate
- Project NPV rising to US$27 billion upon commencement of production
- Project after-tax debt-free internal rate of return (“IRR”) of 26%
- Annual operational EBITDA ranging between US$1 and 3 billion through various volume and price outcomes
- High margin business model with average cash operating costs estimated at US$27.2 per tonne, delivering industry leading cash margins of 70 to 85%
- Two stage financing plan with stage 1 comprising US$1.63 billion and stage 2 comprising US$1.93 billion (total US$3.56 billion) for installation of 10Mtpa capacity
- Funding plans well developed to deliver tailored financing package
- First product expected in 2021 followed by completion of fit out and ramp-up with 10Mtpa rate anticipated in 2023
The scheme, which will be the UK’s first potash mine in 40 years, was approved by the North York Moors National Park Authority last year, and Sirius says it will create more than 1,000 jobs by tapping into the world’s largest and highest grade of the fertiliser.
SITE: An artist's impression of Sirius Minerals' mine. Whitby is to the north of the image.
Construction could start this year, once engineering and design work has been finalised and contractors have been hired to prepare the site, sink mine shafts and dig an underground transport tunnel.
The company previously revealed hopes of extracting 13 million tonnes of polyhalite every year, from an overall defined store of 2.66 billion tonnes.
It already has a number of supply agreements for York Potash, including a deal with a US-based firm to annually dispatch 1.5 million tonnes for seven years, which could be extended further across two five-year periods.
The firm, which has already spent about £125m on the development, will sink mine shafts at the former Doves Nest Farm, before shifting the mineral underground on a conveyor belt to a handling site at Wilton, near Redcar, for granulation, storage and distribution.
The development has been approved by the North York Moors National Park Authority and Redcar and Cleveland Council’s regulatory committee.
A decision on an adjoining harbour, earmarked for Bran Sands, on the mouth of the River Tees, to load ships carrying exports, is expected from the Government in the coming months.
Sirius previously confirmed to The Northern Echo it was committed to using the region’s supply chain in construction, with Mr Fraser revealing it had a database of about 500 local companies, which could be used by contractors in the construction phase.
He added: “We have worked hard to get here, and now we have to get on building the mine as quickly as we can and at the lowest environmental impact we can.
“We have the database and the contractors and a local workforce is the best workforce for any project because they know the area.”