Sirius gets green light to build UK’s largest potash mine

Sirius Minerals gets green light to build UK’s largest potash mine

North York Moors National Park. (Image courtesy of North York Moors)

The North York Moors National Park has approved Sirius Minerals (LON:SXX) proposed $3.15 billion potash mine within the conservation area’s boundaries.

A special planning committee of the park voted 8-7 in favour of the project, expected to generate at least 1,000 permanent jobs and inject US$1.6 billion a year to the British economy.

While the company has yet to secure financing for the development, Andy Wilson, chief executive of the authority, said the mine was a “once in a lifetime opportunity.”

“The economic impact of the mine outweighed the environmental harm,” Wilson noted.

“We’re obviously very happy but the hard work only begins now,” said Sirius Minerals chief executive Chris Fraser according to AFP, adding that the mine would support government efforts to strengthen the economy of northern England, which lags behind the south.

The York Potash project was opposed by a consortium of 29 campaign groups, including the Campaign to Protect Rural England, which said that the mine was a “huge damage” to the moors and undermined the protection of all national parks.

Legal challenge on the horizon

“[We will consider] a legal challenge of the decision, given that this is such an important test case of the protection for National Parks in national planning policy,” Ruth Bradshaw, policy and campaigns manager at the Campaign for National Parks said in a statement. “We have six weeks to apply for a judicial review so we now need to decide whether there are grounds for such a challenge.”

To develop the mine, Sirius will have to dig underground shafts within the 1,430-square-kilometre (554-square-mile) park before boring out the mineral from deposits under the land and the North Sea. The polyhalite would be crushed and processed down the mine before being fed to an underground pipe and taken as slurry to a port 28 miles away.

Construction of the mine will take about five years.

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 $307 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 closed down 2.6% Tuesday to 14.61p.