THE UK’s first potash mine in 40 years has moved closer after its founder secured Government support.

Sirius Minerals says it has received initial Treasury backing for the £2bn York Potash Project.

Bosses say Infrastructure UK (IUK), a division of Whitehall’s finance department, has given the firm prequalification status.

The support will help Sirius’ efforts in securing finance for the mine, which is planned for three miles outside Whitby and will extract the fertiliser polyhalite.

However, it does not represent a guarantee of a cash offer or an underwriting commitment.

The company, which expects to create 1,000 direct jobs at the mine, says IUK will carry out due diligence on the plans, adding if a pledge is forthcoming, it could provide valuable funds alongside help from banks and Government-backed credit agencies.

Chris Fraser, Sirius’ managing director and chief executive, said the IUK move represents another chapter in the business’ proposals becoming a reality.

He said: “The York Potash Project is a nationally significant proposal underpinned by a robust business model, so it aligns well with the IUK criteria.

“Prequalification is an important step forward for this element of our overall financing strategy, which we continue to progress rapidly.”

Mr Fraser previously told The Northern Echo building of the mine could begin late this year, or early in 2016, once engineering and design work has been finalised and contractors have been hired to prepare the site.

Sirius has a number of agreements to supply its polyhalite, and last month revealed a multi-billion dollar deal after extending a contract with a US-based company to send the fertiliser across the Atlantic.

It will annually dispatch 1.5 million tonnes for seven years, which could be extended further across two five-year periods, making it the biggest and longest out of all of Sirius’ existing sales agreements.

Sirius has arrangements in place to send 3.1 million tonnes of polyhalite to customers every year, with a further 4.8 million tonnes lined up for other annual commitments.

Alongside its US tie-up, the company has a deal with a Central American fertiliser distributor for 250,000 tonnes of polyhalite a year, and a commitment with a South American distributor for 300,000 tonnes a year over seven years.

The firm, which has already spent about £125m on the York Potash 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.

A decision on an adjoining harbour, earmarked for Bran Sands, on the mouth of the River Tees, to load ships to export polyhalite around the world, is expected next summer.

The York Potash mine was approved by the North York Moors National Park Authority earlier this year.