Bloomberg News

Sirius CEO Talks With Investors on U.K. Potash Mine Funding

November 27, 2012

Sirius Minerals Plc (SXX), planning to build a potash mine in the U.K., is in talks with potential partners to help fund the project in the North York Moors National Park that has been estimated to cost $2.7 billion.

Sirius will seek minority venture partners in the project, which may be attractive to potential fertilizer customers, Chief Executive Officer Chris Fraser said in an interview last week at the site in northern England. “We’re also talking to strategic financial investors as well, where that injection of capital would probably provide the earlier part of the funding.”

The project, called York Potash, hosts the world’s largest estimated resource of polyhalite, with 2.2 billion metric tons of the material used to make sulfate of potash. The U.K.’s only potash mine, Boulby, is immediately north of York. Potash is a form of potassium used to strengthen plant roots and protect against drought.

An updated study into the mine development is due early next month and Sirius is likely to scale back initial costs by focusing on producing granulated polyhalite rather than adding a layer of processing, Macquarie Group Ltd. said Nov. 20. That may cut as much as 40 percent from the $2.7 billion estimated mine cost and 60 percent from the operating costs, according to Macquarie analyst Alon Olsha.

“The potential capital and operating cost advantages of this new strategy could well ensure the success of future capital raisings,” Olsha said.

The proposed site is about 4 kilometers (2.5 miles) from the coastal town of Whitby and is currently used for farming and commercial forestry.

Sirius was unchanged at 21.75 pence at 11:24 a.m. in London trading. The stock has dropped 18 percent this year, valuing the London-based company at 291 million pounds ($466 million).

To contact the reporter on this story: Jesse Riseborough in London at

To contact the editor responsible for this story: John Viljoen at

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