unlikely to help Sirius12 Aug 2019 16:45
https://www.thetimes.co.uk/article/eurochem-pours-cold-water-on-siriuss-north-york-moors-mine-dnfhsssgk
The timetable that Sirius Minerals has set itself for building a giant fertiliser mine under the North York Moors looks “almost impossible”, according to an established industry player.
The company is trying to secure a $3.8 billion financing that it says would pave the way for the Woodsmith mine near Whitby to produce ten million tonnes of polyhalite a year by 2024.
Eurochem, a privately owned fertiliser company with annual revenues of $5.6 billion, said that such big projects usually took far longer. It also questioned the market for polyhalite. Clark Bailey, Eurochem’s head of mining, said: “There’s no way in my mind they’ll be able to get there in five years.”
The comments are unlikely to help Sirius as it tries to sell $500 million in junk-rated bonds by the end of next month to avoid possible administration; its shares plunged last week after it postponed the offering, blaming market conditions. Sirius said that the criticism from a competitor gave it “even greater confidence that we are on the right path”.
Eurochem is based in Switzerland and is about 90 per cent-owned by Andrey Melnichenko, a Russian billionaire. It employs more than 26,000 people producing nitrogen, phosphate and potash fertilisers.
Potash is a common fertiliser, with global production close to 60 million tonnes a year. Eurochem is developing two large potash mines in Russia, the first of which started up last year.
Polyhalite is an alternative fertiliser which also contains potassium but in lower density and it is not widely used at present. ICL’s Boulby mine, in North Yorkshire, is the only producer and is targeting annual output of a million tonnes by the end of next year. Sirius’s plans involve a 1,500 metre deep mine and a 23-mile underground conveyor belt to transport polyhalite to Teesside for export. It is aiming for to start production in 2021.
If Sirius does succeed, it could reduce demand for potash. It has struck “take or pay” agreements with fertiliser distributors which it says shows demand.
However, Eurochem said it did not see Sirius as a potential competitor and its own forecasts for global markets did not assume any production from the Woodsmith mine.
Mr Bailey, 67, said Woodsmith was a “huge project” which had “issues technically”, adding: “They can sell poly, the question is whether or not you can sell that volume of poly.” Eurochem’s analysis did not see many farmers choosing it. “It really has to be seriously discounted to get farmers’ attention . . . if they are going to switch over to polyhalite from potash, they will go from something they are accustomed to, to more of an experiment,” Mr Bailey said.
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