A MULTI-BILLION pound fertiliser mine appears closer to fruition after Australia’s richest woman gave it £250m backing.

Sirius Minerals has struck a deal with Gina Rinehart’s Hancock British Holdings.

Bosses say Hancock will invest £250m ($300m) into Sirius’ York Potash project, which aims to extract the mineral polyhalite from land under the former Doves Nest Farm, near Whitby.

Sirius has all major approvals to build the mine, including backing for a harbour on the River Tees.

Once operational, the development is expected to create and support thousands of jobs, with its polyhalite reputed as a rich provider of crop growth due to its potassium, magnesium, sulphur and calcium nutrients.

Under the terms of the finance deal, Hancock will pay £205m ($250m) for the rights to five per cent of gross revenue on the first 13 million tonnes of sales every year, and another one per cent for sales above the 13 million figure.

Hancock, a subsidiary of Hancock Prospecting which has growing agriculture interests, will also subscribe to ordinary shares in Sirius for another £41m ($50m).

Sirius hopes to start production in 2021.

Chris Fraser, Sirius’ managing director and chief executive, said the Hancock agreement represented another step forward in the company’s quest to begin work.

He added: “We are delighted to have signed this agreement with such an experienced party in the mining industry, as well as one that has very successful and strong leadership and a long-term and growing agricultural interest.

“We are focused on the development of what we believe to be the world’s largest high-grade known polyhalite deposit.

“Considering Mrs Rinehart’s and Hancock’s expertise in mining and agriculture, this investment is a significant vote of confidence.”

Mrs Rinehart said Hancock, which has a long history of iron ore work, sees Sirius’ plans as intrinsic to its future growth.

She added: “Sirius has the potential to become one of the world’s leading producers of multi-nutrient fertiliser.

“This fits with my approach of investing in areas for the long-term, and I hope the product is of assistance to many Australian farmers.”

The Northern Echo previously reported how Sirius had revised down construction budgets, saying it now needs $2.91bn (£2.1bn).

The Northern Echo understands officials are continuing to finalise funding arrangements with other prospective lenders.

Sirius mine will be supported by a Teesside harbour, which was approved by the Government in July and is expected to ship fertiliser to customers around the world.

The base will oversee distribution of polyhalite after it is transported on an underground conveyor belt to a handling site, at Wilton, near Redcar.

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.

Sirius 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.