Israel Chemicals Ltd. (ICL) and the U.K.’s Sirius Minerals plc are not engaged in any talks about a potential buyout of ICL’s Boulby assets in northeast England, according to Israeli sources speaking with Green Markets this week. Junior firm Sirius is developing a polyhalite mine just 12 miles from the ICL Boulby operation. Last week, ICL UK subsidiary Cleveland Potash Ltd. announced the transition timescale for its plans to cease potash production at Boulby and mine only polyhalite (marketed as polysulfate) and salt at the site (GM Jan. 5, p. 23). Potash production is proposed to cease by the end of June this year.
Reports of ICL and Sirius in talks over a potential multi-million buyout of Boulby were circulating in the Israeli financial press last autumn (GM Sept. 15, 2017). ICL, which has been selling off assets in the past few years as part of its strategy to reduce debt, said at the time that “it was studying various options, including cooperation and the sale or purchase of companies.”
In response to inquiries this week as to whether any talks between the two companies were ongoing, a spokesperson for Sirius told GM the firm never comments on market rumors. “If Sirius chose to depart from its current stated strategy, then we would be obliged to make a stock market announcement in the first instance,” he said.
Buying the Boulby assets would provide Sirius with earlier production and cash flows than otherwise; first production at Sirius’ Woodsmith mine is targeted for 2021. But it would mean taking on the added operational risks of Boulby’s generally aged infrastructure, according to comments made by the U.K.-based investment group Shore Capital last autumn. The investment group wasn’t keen on Sirius buying the ICL assets. It said the sale price would need to be “really compelling,” with the Israeli company retaining responsibility for any historical liabilities.
That said, it is still thought that some form of cooperation between ICL UK and Sirius could be possible.