RE: First Polyhalite or major derisk?29 Nov 2019 23:34
Hi, GK, yes, I found the thesis and read some parts long time ago, but still remember some of the problems encountered and the measures taken at Boulby. Woods, Smith, and Clark who had been taken key roles in the Boulby mine are now working for SM), their experience on the construction of the Boulby shafts is very helpful for SM.
SM will 2 SBR for each of 2 deep shafts without freezing, as revealed on the DMC website (Myo found the info and I posted here a few days ago). If freezing method is not used how to handle the wet layers from 1300m down would be a challenge (possibly mainly grouting as you mentioned). SBR has never been that deep before. They reached 1005m in Saskatchewan, Canada.
DMC did two not as deep shafts (1005m) in 6 years to reach the bottom and will still need another 2 years to do the watertight lining (The watertight composite concrete and steel final liners to be installed from a depth of approximately 900m upwards to the surface). The sinking started in 2012 and was paused in 2014 to manage adverse ground conditions and then continue to reach bottom in August 2018. It has invested about $3.5 billion on the first phase of the project, including sinking two shafts, and said it is about 84 per cent complete.
Hopefully, DMC's experience in Canada for the two BHP shafts would help them similar things for SM faster, cheaper, and better (if all goes well).
As already reached the bottom, the two BHP shafts have almost fully re-risked. However, BHP is looking for a strategy partner to share the cost to complete the mine. Can SM be BHP's halo partner or BHP be SM's halo partner (as some had hoped for) when they still yet to decide if and when to place their mine into production (at a time when MOP oversupplies is over)? This makes BHP or other big MOP partner unlikely. Hope ADM, Qatar, ICL, Fortescue, Gina, i.e., those have been involved in some way to provide further help to derisk the financial and construction risk. The market risk was also high, as credit rating companies only recognized ADM TorP as the good one (the ones with China small companies and the one with Brazil might be considered poor); However, with the signing of the quality European, Qatar, and Indian sales agreement, the marketing risk seems to be much lower than before.
Yes, the $600m is mainly for and barely enough for reaching the first Poly in service shaft only, so as to demonstrate the SBR can the bottom safely (if all goes well). They did say when the money is raised, they will work on all four shafts; but the safe way to make the first poly reached in 2021; they may have to delay the work on the production shaft (or even delay the purchase of the second SBR).
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