Scarborough, England—The first phase of junior U.K. potash company Sirius Minerals plc’s North York Potash project in northeast England could cost $3.56 billion to deliver the initial targeted 10 million mt/y capacity that could take five years to build, according to the long-awaited definitive feasibility study (DFS) for the project. However, the report, released March 17, showed that the operation has the potential to generate underlying annual earnings (EBITDA) of between $1 to $3 billion, depending upon volumes and price. Sirius said the mine could start production of polyhalite in the next five years and reach the 10 million mt/y target by 2023. There is potential to double capacity. The net present value of the project, located in the North York Moors National Park near Whitby, is currently $15 billion using a 10 percent discount rate, the DFS showed. This figure rises to $27 billion once the mine starts production. “Work is advancing with our financing partners globally to bring together the pieces of the initial financing for this project,” Chris Fraser, Sirius Minerals’ managing director, said. “This process is expected to take a number of months, but certain parts of the early construction activity, such as highway upgrades, are commencing soon to facilitate an efficient start of the project.” Sirius has secured take or pay offtake agreements for 3.6 million mt/y of the initial output for the first 5 to 10 years of production. It additionally has entered into various other commitments that bring the total volume allocated to customers (including customer expansion options) to 7.9 million mt/y. Sirius says it is confident of securing further commitments during the construction phase. Late last year, the company secured the final milestone in the planning approval process for the mining and transport licenses for the operation (GM Oct. 23, 2015).
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