Sirius Minerals is looking at ways to expand the capacity of its fertiliser mining project in Yorkshire by 50 per cent, days after gaining a key planning approval.
The mining group is seeking finance for its polyhalite mine, which is expected to cost at least £2bn and take five years to build.
A study of the mine expected by the end of this year would consider ways to increase the project’s initial annual production capacity from 6.5m tonnes to 10m tonnes, Sirius said on Friday.
Work was also being done to look at “securing the ability to potentially double the infrastructure capacity” to 20m tonnes a year, the company said.
Sirius has previously talked of mining up to 13m tonnes a year of polyhalite, a mineral rich in various crop nutrients including potassium.
Getting to 10m tonnes of annual output, rather than 6.5m tonnes, as quickly as possible would enable the company to maximise the use of the shiploading facilities it intends to build at Teesside, about 35km from the minehead. The mine and port are set to be linked by a 6m wide tunnel starting under the North York Moors national park.
Sirius fought a lengthy planning battle to win the most important approval for the project, culminating in a narrow vote in its favour last week. The company said it expected final decision notices for outstanding planning issues by the end of September.
Sirius also gave further details on Friday of its financing plans after Chris Fraser, chief executive, said the company would seek a mix of debt and equity for the first, riskier part of the mine’s construction.
A number of “cornerstone debt investors” were about to start due diligence work and financing was expected to conclude in the first quarter of next year, Sirius said.
“The company has always maintained that the project will require multiple financing and these will be carried out when required, when opportunities present themselves and always with the best value to shareholders in mind,” said the company, which has an estimated 20,000 small investors, including 5,000 in Yorkshire.
“The stated and ongoing strategy is to access debt markets for the majority of the project construction because the underlying economics of the project business model lend themselves to high leverage and because that should be in the best long term interests of shareholders.”
Shares in Sirius fell 10 per cent on Friday, giving the company a market capitalisation of about £420m.