Express Article part 121 Sep 2019 12:42
Not reading board for a bit but will post this!! (If it posts)
Sirius Minerals share price: Why Britain's deepest mining project is on brink of collapse
IF YOU’RE in a hole, they say, stop digging. And Sirius Minerals – the owner of what could one day be Britain’s deepest mine – is certainly in a hole.
The firm’s share price fell 60 percent this week on the news it had abandoned a £403million bond issue designed to fund the next stage of its plan to create huge fertiliser workings deep under the North York Moors National Park. It casts a dark shadow over a project that has transformed the morale of a region blighted by the loss of industries such as coal-mining, steel-making and fishing. Sirius employs 1,200 people and – if production does eventually get under way – should support a further 1,500 jobs in its supply chain, generate £470million a year in tax receipts and contribute £2.3billion per annum to the GDP of UK plc.
In a bid to understand why such a potentially beneficial operation should be teetering on the brink of collapse the Daily Express visited the company’s Woodsmith Mine, two miles from Whitby. What we discovered was nothing short of awe-inspiring.
Two vast mine shafts are being sunk to exploit a massive deposit of polyhalite, an ingredient used in the manufacture of fertiliser, which could keep Woodsmith in business for 100 years.
A service lift takes me down 150 feet to where the mine shaft proper extends a further 230ft down on its way to reaching a target depth of just under a mile.
As I gaze at the super-sized concrete panels that line the shaft, a construction supervisor orders me to move to avoid being hit by drips as a crane lowers in the first of a series of five-ton consignments of liquid concrete.
If the project does get completed, 10 million tons a year of polyhalite will travel by conveyor belt along a purpose-built 23-mile long tunnel to a deep-water port on the River Tees.
Such an ambitious project doesn’t come cheap, of course, and therein lies the problem.
The bond issue that was pulled this week would have released £2billion. In its absence, plans are being made to wind down the pace of construction to conserve the firm’s remaining £180million of funds as Chris Fraser, the Australian former investment banker who founded the company, and his lieutenants work out what to do next.
Meanwhile, a ring-fenced £50million sits in the bank waiting to fund the filling in of the vast holes – should Sirius fail to secure the backing it needs to make the mine operational.
Such an eventuality would be a tragedy, not only for Fraser and his shareholders but the local community. “Tourism is the only industry we have apart from a few solicitors and accountants,” says Penny ****ill, 68, a retired hotelier who is one of Sirius’s 85,000 individual investors, many of them locals.
“There is some farming but it’s minimal and fishing has been decimated. We need something like this desperately.”
Sign In
Follow the stocks
