UK authorities to review bid for $2.7bn potash project in national park
London-listed Sirius Minerals (LON:SXX) handed local authorities Tuesday planning applications both for its massive York potash mine and mineral transport system and a materials handling facility at the North York Moors National Park.
The proposed mine, poised to be one of the world’s largest in terms of the amount of potash extracted, has faced controversy since it was unveiled in January 2011.
The UK Ministry of Defence (MOD) expressed fears over the possibility that the mine could interfere with its missile early warning system. There are also other concerns, including subsidence, vibration, frequency interference and the impact on water reservoirs in and close to the North York Moors National Park.
But Sirius said it had since worked with the park authority to agree an informal pre-application "Planning Position Statement", where the benefits of the mine have been pegged against the expected "adverse impacts on the National Park," especially during construction.
"We have planned the project with a very high regard for the environment and where possible minimising associated impacts," managing director and chief executive Chris Fraser said in a statement. "However, it is now for each authority to determine the applications according to the relevant policies and we keenly await their decisions."
The North York Moors National Park Authority said it would consider the application at a special Planning Committee meeting in January 2015.
"The Authority understands the significance of the proposals and will carefully assess the planning considerations of the development which will include the environmental impacts and economic benefits. We will approach the new application with an open mind,” the park’s director of planning, Chris France, said in a statement.
Sirius had originally expected to begin production in late 2016, with initial output of 5 million tonnes per year and had signed a few future supply agreements. The current development schedule, however, points at 2018 as the most likely time for production to begin.
According to the company, the mine will employ about 1,800 workers during construction and generate 1,000 permanent jobs once opened.
Current potash market conditions are not optimal for new players. The already oversupplied sector has seen several other major developments, the biggest being BHP Billiton’s (ASX:BHP) Jansen mine with its 5.3bn tonnes of measured resources and 1.3bn tonnes of inferred potash, going back to the drawing board.
The fertilizer ingredient is currently trading about $300 a tonne. Producers such as BHP need prices as close as $500 per tonne as possible, so they can cover construction costs.
Shares in Sirius were up 1.79% Tuesday to 14.25 p in early afternoon.