THE company behind the Yorkshire Coast’s major potash mine project is ready to start test drilling in the area after securing £20m.
Sirius Minerals, which plans to build the first UK potash mine for 40 years between Whitby and Scarborough, has raised the figure through a placing of new shares.
The company says it will be using the majority of the money to start a new test drilling programme and geological studies, which will eventually determine where the mine head will be placed.
Plans for the mine were unveiled in January when 600sq km of mining rights between Scarborough and Whitby were sold by York Potash to Sirius Minerals.
Following the takeover Sirius, which specialises in potash exploration and development, announced proposals for the mine which is estimated to created up to 5,000 jobs both directly and indirectly, with 1,500 jobs created alone during the development and construction phase and 1,000 people operating the mine once it starts yielding potash.
Chris Fraser, chief executive of Sirius Minerals and founder of York Potash, said: “The strong support Sirius received in the placing endorses our strategy to build the New Potash Powerhouse.
“These funds will enable Sirius to significantly progress our portfolio of potash projects, but in particular the York Potash Project.
“This is further evidence of our commitment to the York Potash project and our aim to continue to work closely with local authorities and stakeholders to try deliver a project that benefits the region for generations to come.
“There is clearly a lot more work to do and we are still at the early stages, but we will work as quickly as possible to progress more detailed plans that we can consult with local people on.”
Sirius raised the £20 million by placing 153,846,153 new ordinary shares at 13p per share.
Once test drilling has been carried out, and if a suitable location for the mine head can be found, Sirius will then submit a formal planning application to Scarborough Council for the mine and accompanying infrastructure.
Mr Fraser said; “The project will take a while. The time frame for getting a planning application at best is 18 months. We could then start construction in two years and it will take three years to build.
That is really is absolute best case scenario though. It could be longer.”
Sirius, which is an AIM-listed company and also has projects in Australia and the USA, believes the proposed mine has the potential to unearth billions of pounds worth of potash, which currently sells at around $600 US at tonne with an estimated six billion tonnes lying under the Yorkshire Coast.
The project is still in its early stages but if it goes ahead Sirius estimates agricultural potash, which is a powdery salt used in fertilizers, could be extracted from the new mine for the next 50 years.
The UK is currently only served by the Boulby Mine, which is also in North Yorkshire and is operated by Cleveland Potash Limited.