For details on how to contact our editorial and commercial departments, click here
Sirius Minerals says York Potash Project will not be affected by potash price worries
THE company behind plans to build a £1.5bn mine that could create 1,000 jobs has reiterated its commitment to the plans, despite its own broker claiming its shares were not worth buying.
Sirius Minerals wants to mine polyhalite, a form of the fertiliser potash, under the North York Moors, but was the subject of increased speculation after an analyst from in-house broker Jefferies suggested markedly lower target shares prices.
The criticism came amid worries of a global potash price crash when Russian potash firm Uralkali pulled out of a deal with Belarusian partner, Belaruskali, which controlled about half of the international market.
However, Sirius bosses last night refuted speculation over any pricing concerns, saying its polyhalite reserves would provide a key financial buffer.
They said any market changes could affect larger companies dealing in muriate of potash, a source of potassium fertiliser.
Chris Fraser, Sirius managing director and chief executive, said its York Potash Project is built on financially robust foundations and holds a niche position in the marketplace.
He said: “There is little doubt that potential reductions in muriate prices present a problem for existing high cost producers, which could in turn lead to further supply consolidation.
“However, the York Potash Project has a robust business model to underpin its financing and development into a long-term independent supplier.
“The volatility caused in the potash market by the speculation perfectly demonstrates the dangers of the supply of such an important mineral being concentrated among a small number of producers.
“This just re-emphasises the need for new, low-cost, long-life projects that can operate outside the existing restricted market.”
Last month, Sirius, which will terminate its brokerage contract with Jeffries later this month, was forced to defend its plans after a report from Amec, consultants to the North York Moors National Park, said it had overstated the need to locate the mine in its borders.
The company said the claims were nonsense.
A decision to allow the mine in the national park was deferred for a third time in July after Sirius asked for time to address environmental concerns, including pollution and damage caused by pipelines to habitats, which were raised in Amec's report.
Mr Fraser said: “There is a very clear and strong case for the national park to approve the application for this exceptional project.”
Comments are closed on this article.