Construction of a £2 billion potash mine on the outskirts of Whitby could start as soon as September – amid cost cuts on the project.
At that time the firm said it hoped to start constructing the workings in the new year but this week mine bosses explained what had prolonged preparations, how they had reduced funding costs by the equivalent of $600 million US dollars and how the European Union ‘Leave’ vote “had done
wonders” for share prices.
Fine-tuning designs and utilising different construction methods has led to savings of £600 million on the amount that Sirius needs to raise to fund its groundbreaking project - which at full capacity has the potential to produce 20 million tonnes per year of polyhalite fertiliser.
Chris Fraser, Sirius managing director said: “A lot of work since the approval has been getting to the point of knowing exactly the amount of money that we want to raise and have the scheme ready to go when the funding comes.
“We are raising less which means it is easier to raise the money. We are working as hard and as fast as we can but our aim is to start work in September in terms of construction; that is entirely reliant on that first stage funding but we feel confident that this is achievable.”
The early part of the construction process involves building the mine shafts and the tunnel which will transport the mined mineral to a processing plant in Teessport.
This represents up to 80% of the entire project, Mr Fraser added.
Prefered contractors for both elements - AMC UK (a joint venture between Thyssen Group and Redpath Group) for mine site development and Hochtief Murphy Joint Venture for mineral transport - were selected last month.
Prior to that, they and the unsuccessful bidders, had been working alongside the preparation of a Definitive Feasability Study, compiled for Sirius, in order to prepare their bids.
Mr Fraser explained that it had been anticipated the study would be ready by December but it got put back four months due to red tape involved with the planning process.
Despite approval being given at that ten hour June 2015 meeting at Sneaton Castle, it was not until October that the official notice of approval was published which Sirius needed to incorporate into its feasibility study and before opening more detailed talks with investors on the global market.
And this global market has not been effected given the referendum verdict which backed leaving the EU.
Mr Fraser added: “Leaving the EU does not have a negative impact on our business at all. We are a US dollar business, if anything the sterling being softer actually helps.
“Also we do not have any long term contracts within the EU. If we are outside the EU, our ability as a country to negotiate trade deals with countries where we do have agreements and developing nations will be hugely beneficial.
“The one thing that has been experienced is the EU lead trade deals which take a long time and simply don’t happen. Britain can take that forward once we are outside the EU. We can go back out and re-investigate the commonwealth like Africa and strike deals with other countries which is where a lot of our product will end up going.”