1,200 jobs at risk after UK government refuses to back $5bn project in Yorkshire
A $5bn project to build a huge potash mine under the North York Moors was plunged into fresh doubt after developer Sirius Minerals was forced to pull a crucial $500m bond issue and admit it had failed to secure government backing.
The company, which lost more than half its market value on Tuesday, now has six months to put in place fresh funding, otherwise it will run out of money and work on the UK’s biggest mining project in a generation will come to a halt, putting 1,200 jobs at risk.
Chief executive Chris Fraser said it was not possible to issue the junk bond — which was required to unlock a $2.5bn financing package for the mine — because of “ongoing poor bond market conditions”. Sirius’ shares tumbled by 60 per cent to 4p.
The project involves sinking two 1.5km shafts below a national park on the North York Moors to access a huge deposit of polyhalite, a mineral that can be used as fertiliser but is not commercially proven. It has already provided a big boost for the local economy, with more than $1.5bn spent so far.
“If we go all the way to March and we have not brought additional funding into the project, then obviously at that point in time we will be down to a minimal number of staff,” Mr Fraser said in an interview, adding that the uncertainties around Brexit had hampered the group’s ability to issue the bond.
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