Sirius Minerals insists that the construction of its $4.2bn (£3bn) polyhalite mine in Yorkshire is still on schedule despite the government cutting £500M worth of funding.
Funding plans for the Sirius Minerals polyhalite mine in Yorkshire have been altered, as the Treasury seeks to reduce risk to the taxpayer. The Treasury and the Infrastructure Projects Authority (IPA) had previously agreed to provide $1.5bn (£1.1bn) for the scheme, but has lowered that figure to $1bn (£760M) to reduce potential risk to the taxpayer.
Release of the government money now depends on construction milestones being achieved.
Finance for the project comprises $500M (£380M) to £750M (£570M) of bonds plus $1.5bn (£1.1bn) in commercial loans which have yet to be secured.
This has led to fears that the project could run out of cash and face delays.
The Times has reported that if Sirius fails to secure funding, the project’s remaining $230M (£175M) of cash reserves could run out in the second quarter of this year.
However, a spokesperson for Sirius Minerals told New Civil Engineer that the project is still on track.
“The project time line is unchanged, we still aim to reach the polyhalite seam in 2021,” the spokesperson said. “We are still going through due diligence process ahead of finalising stage two financing and still in negotiation with banks and lenders.”
The mine aims to extract 20M.t of polyhalite per year after scheduled completion in 2024.
Construction is already well underway with the UK’s first use of an innovative vertical shaft sinking machine (VSM) taking place at the end of last year.
The project involves installing the longest ever conveyor belt in a tunnel under the North York Moors. The 37km tunnel will transport the polyhalite from the mine beneath the Moors to reduce the impact of the mine on the protected landscape.
Sirius minerals project overview
Prime minister Theresa May backed the project earlier this month. “This is exactly the sort of project that is what the Northern Powerhouse is all about: driving investment, driving exports, good for the north,” the prime minister told the House of Commons.
However, the project costs have risen dramatically following changes to tunnelling, with the cost of the tunnel transport system rising 70% to almost $1.5bn (£1.1bn).
The first drive of the tunnel boring machine for the transport tunnel is scheduled to start in the second quarter of this year.
Austrian contractor Strabag is handling the procurement, engineering, and construction of the mine’s tunnel system.
Like what you’ve read? To receive New Civil Engineer’s daily and weekly newsletters click here.