UK-based Sirius Minerals has announced plans for a potash mine in North Yorkshire, following the completion of a detailed scoping study (DSS).
The company said that York Potash has the potential to become one of the world's most important mining and fertilizer projects. Funding options are now being exploredfor the first $2.7 billion development phase.
The project will be sited between Whitby and Scarborough, although Sirius has not yet specified a precise location.
Sirius said that the DSS evaluated the project from a technical perspective to identify a sustainable development concept, estimate capital and operating costs, demonstrate the potential of the project, define the risks and their mitigation and identify further opportunities for optimisation. Specific studies were undertaken by third party consultants in the areas of shaft design, mining, ore transportation, processing, energy efficiency, infrastructure, shipping and marketing.
According to Sirius, global demand for potash is showing no signs of slowing down. It said that potassium chloride or muriate of potash (MOP) consumption is expected to grow at 3.5 per cent per annum from 58 million tonnes in 2012 to 65 million tonnes in 2016 and 75 million tonnes in 2020. Sulphate of potash (SOP) consumption is expected to grow even faster, from 7.5 million tonnes in 2012 to 9.3 million tonnes in 2016 and 10.3 million tonnes in 2020.
Potash is mainly used in fertilisers.
Chris Fraser, managing director and CEO of Sirius commented: "The completion of the York Potash detailed scoping study is a significant achievement for Sirius and the results confirm the strength and quality of the project. York Potash has the potential to be the largest low-cost SOP mine in the world and towards the bottom of the global potash cost curve after accounting for the potential value of the by-products produced by the project.
“The estimated US$2.7 billion Phase 1 capital that is required to become a significant global producer is competitive and we believe financeable. The successful completion of the detailed scoping study allows us to quickly progress onto the feasibility studies which will further define and de-risk the project in preparation for financing. Our next milestone for the project is to deliver the maiden JORC resource statement at the end of May 2012."
The company also said that York Potash has the potential to be one of North Yorkshire’s largest employers. At the end of Phase 1, it is expected that the project will employ over 700 people with approximately 430 jobs being at the mine, and by the end of Phase 2 this will increase to a total of over 1,170 of which 700 will be at the mine.
Sirius Minerals is a globally diversified potash development company, with the aim of bringing on-stream major potash mining facilities through the acquisition and development of projects overlying recognised potash deposits. It holds properties in the UK (North Yorkshire), the US (North Dakota), and Australia (Queensland and Western Australia).
