A FERTILISER mine creating and supporting thousands of jobs will now cost less to build, bosses have claimed.
Sirius Minerals has lowered its budget for the York Potash Project, near Whitby.
The company says it needs $2.91bn (£2.1bn) to construct the mine, which will extract the multi-nutrient fertiliser polyhalite.
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Bosses previously revealed a definitive feasibility study (DFS), wherein they announced a blueprint to raise $3.5bn (£2.4bn) to fund the project through two stages.
However, after assessing fresh information from contractors, they have now cut estimates.
According to the revised financial plans, its first funding stage will now need to raise about £800m, down from an initial £1.1bn, with the vast majority of the cash earmarked for development of the mine site.
The company’s second funding phase is now valued at £1.3bn, lower than the original £1.44bn estimate.
The firm is continuing to finalise funding arrangements for the scheme, with 15 prospective lenders involved in initial talks over stage two backing.
However, The Northern Echo understands some of the first agreements could be concluded before the end of the year, allowing workers to get on site.
Chris Fraser, Sirius’ managing director and chief executive, said he was delighted the project, worth an estimated £11.3bn, is moving ever closer.
He said: “The reduced funding requirement will be a significant benefit to the already attractive economics.
“It was noted at the time of the DFS that we considered it to be a conservative estimate and that opportunities existed to reduce costs.
“We look forward to continuing to work with our contractors and their local supply chains as we move into the delivery phase and maximise value for shareholders and the wider economy.”
Sirius says the mine, planned for land at the former Doves Nest Farm, near Sneaton village, will create more than 1,000 direct jobs and support a similar number in the construction phase and supply chain.
AMC UK, a joint venture between Thyssen Group and Redpath Group, was previously revealed as the preferred contractor to develop the mine, with the Hochtief Murphy joint venture selected to build the mineral transport system, which will take polyhalite underground to a handling site at Wilton, near Redcar.
According to its refined financial outlook, Mr Fraser revealed AMC’s plans have helped cut costs.
He added: “The most significant component in the reduction has been the optimisation of the shaft design and construction method by AMC.
“Its plans are more effective and reduce the amount of temporary construction equipment, such as winding towers, and early use of permanent equipment.”
Officials hope to start production in 2021 and The Northern Echo last month reported Sirius had discovered greater reserves of polyhalite.
Bosses said their probable stock now stands at 280 million tonnes, which is higher than a previous 250 million tonne estimate and of better quality.
They added fresh tests have also shown polyhalite, reputed as a rich provider of crop growth due to its potassium, magnesium, sulphur and calcium nutrients, is capable of bolstering chilli pepper, tea and oilseed rape yields.