- ITV Report
A major mining project which would deliver more than 1, 000 jobs across Whitby and Teesside has been thrown into doubt. The company has announced that it’s £ 2.5 billion short of the cash it needs, to continue on schedule.
Construction of the potash fertilizer mine near Whitby – and a linked processing plant in Redcar – is now being slowed down by Sirius Minerals, because of the investment shortfall.
Shares in the mining firm plummeted in early trading, shedding more than half of its value after it said it would be scaling back production at the site near Whitby.
The company said it believes its major bond offering cannot go ahead “in current market conditions” and will launch the “comprehensive” review over the next six months to assess different ways to secure the necessary funding for the project.
Due to the ongoing poor bond market conditions for an issuer like Sirius we have not been able to deliver our stage 2 financing plan.
As a result, we have taken the decision to reduce the rate of development across the project in order to preserve funding to allow more time to develop alternatives and preserve the significant amount of inherent value in this world-class project.
This is the most prudent decision to give the company the time necessary to restructure its plans to move the project forward.
– CHRIS FRASER, MANAGING DIRECTOR AND CHIEF OPERATING OFFICER OF SIRIUS
What options does Sirius have now?
The company say they have two. One, come up with another finance package or two, find a new business partner to help shoulder the cost. But neither of those options is easy.
Sirius failed to find the money because of ‘difficult market conditions’. There’s no government funding option left, after an 11 th-hour appeal from Sirius for treasury funds to help them was rejected. The government refusal prompted renewed criticism from local MP Anna Turley.
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