Sirius Minerals plc, Scarborough, England, announced this week that it has agreed and finalized the mineral transport system (MTS) fit-out with Vienna-based Strabag AG for its North Yorkshire polyhalite mining and processing project. It said it has varied its existing MTS tunnelling contract with Strabag to include the engineering, procurement, and construction of the fit-out of the MTS, and the contract price is in line with its revised project capital estimate (GM Sept. 7, p. 1) The Austrian firm is designing and building drives 1, 2 and 3 of the MTS (GM March 30, p. 28; Sept. 7, p. 1).
The MTS fit-out deal marks the completion of Sirius’s major construction procurement program to support Sirius’ stage 2 senior debt financing process for the polyhalite project. Chris Fraser, the company’s managing director and CEO, described it as “a significant milestone” for the project.
Sirius said the MTS contract will be now be provided to the stage 2 lenders for review by the leaders’ independent technical consultants. Following the completion of the procurement contract review, the company and its lenders will assess the required capital contingency levels for the project and will determine the overall capital funding requirement.
Sirius announced an upward revision of the stage 2 capital funding requirement in September to $3.4-$3.6 billion, up from $3 billion (GM Sept. 7, p. 1). This week, it re-iterated that it believes a $3-billion senior debt financing is “the appropriate” level of debt, and it will not seek to increase this amount.
Final lender commitment letters are expected to be received in December 2018 and January 2019, with financial close of stage 2 financing remains targeted in the first quarter of next year.
The MTS fit-out scope includes the fit-out of the MTS conveyor, the maintenance railway, electrical and communications infrastructure, and all other services in the tunnel essential to the operation of the MTS, which will carry the mined polyhalite from the Woodsmith mine 37km to the materials handling facility at Wilton, Teeside.