* Anglo proposes offer of 5.5 pence per Sirius share
* 34% premium to Sirius' last closing price
* Sirius shares had plunged amid uncertainty over project
(Adds shares, background, CFO comments from media call)
By Yadarisa Shabong and Barbara Lewis
Jan 8 (Reuters) - Global miner Anglo American Plc is
in advanced talks to buy fertiliser company Sirius Minerals
for about 386 million pounds ($507 million), throwing a
potential life-line to Britain's biggest mining project.
If the indicative offer succeeds, it could save hundreds of
jobs in northern England as well as diversify Anglo American's
portfolio.
So far the project has struggled to get financing and
analysts have questioned whether there is a market for the kind
of fertiliser it would produce.
Shares of Sirius surged 34% to Anglo's proposed offer price
of 5.5 pence in early Wednesday trade, while Anglo shares
slipped more than 2%.
Sirius has been reviewing the North Yorkshire polyhalite
mine after scrapping in September a plan to raise $500 million
in a bond sale, delaying the project.
The review included a search for a major strategic partner
and financial investor with the aim of getting $600 million of
funding to develop the project.
Many local people have invested in the plan, which involves
tunnelling under the North York Moors National Park to exploit
what Sirius has said is the world's largest deposit of
polyhalite, a multi-nutrient fertiliser.
Sirius shares lost more than 80% of their value last year.
Anglo said it had identified the project as a "tier one"
asset, meaning it is a large scale, long-life, high margin
deposit. It could play a role in Anglo's efforts to adapt its
portfolio to the needs of an expanding population.
In a media call, Anglo's finance director Stephen Pearce
said the Sirius project provided a rare chance to buy near the
bottom of the market.
"This is almost the ideal time," he said.
The project could also help Anglo move away from more
polluting assets, notably coal, as investors demand miners
become more climate aware.
Pearce said the company was shifting its portfolio to
commodities needed for developed economies with growing
populations and "a cleaner, greener, more sustainable world".
If the offer succeeds, it would mark a return by Anglo to
the fertiliser industry in northern England.
Until it sold out to Israel Chemicals in 2002,
Anglo was joint owner of the Boulby mine, near Sirius' project,
which is the world's only producing polyhalite mine.
Anglo also had niobium and phosphates businesses in Brazil,
which it sold in 2016 when it was recovering from the 2015-16
commodities crash.
($1 = 0.7617 pounds)
(Reporting by Yadarisa Shabong in Bengaluru and Barbara Lewis
in London; Editing by Jason Neely and Mark Potter)
