Sirius stock collapses after unveiling plan for UK’s largest potash mine
Shares in potash miner Sirius Minerals (LON:SXX) crashed Friday, plunging by double digits, as the company unveiled detailed plans to begin constructing what will be the U.K. largest mine of the fertilizer ingredient, within the boundaries of a national park.
The stock was trading almost 12% down mid-afternoon at 18.75 p., as the miner said it was moving onto financing and construction for its $3.15 billion project, which will tap into the world’s largest and highest grade potash deposit.
The proposed mine, which got a key approval earlier this month from the North York Moors National Park authority, is expected to generate at least 1,000 permanent jobs and inject US$1.6 billion a year to the British economy.
Chief executive, Chris Fraser, said that the company was quickly progressing on the project. But last week’s approval is only the first of many steps Sirius needs to take before begin construction.
"With the underlying strength of our business model, unique product and sector fundamentals I believe we are only at the beginning of a very steep value curve as we move towards becoming a major multi-nutrient fertilizer producer," Fraser said in a statement.
While the company has yet to secure funds for the development, Fraser added that the first stage of financing, to pay for the construction phase, was expected to be done by the end of the first quarter of 2016.
The proposed mine was recently opposed by a consortium of 29 campaign groups, which claimed it was a "huge threat" to the moors and undermined the protection of all national parks.
The York Potash project, in the works since 2011, includes the construction of a 37-km (23 miles) tunnel to a processing plant through one of the U.K.’s most protected landscapes.
Sirius is currently completing a definitive feasibility study, which will be finalized by the fourth quarter of this year. Construction will take about five years.