Mining contractors in the UK should keep a close watch on Sirius Minerals, which may be able to offer exciting contracting opportunities in the near future if it manages to raise funding for its new project. The company is looking to raise US$3.5 billion to fund its massive polyhalite mine, which is located beneath North York Moors National Park.
Polyhalite is used in making fertiliser and is a combination of sulphur, potassium, potash and other chemicals.
Sirius Minerals has already released the feasibility study for the mine. If this project takes off, it will be the largest the UK has seen since the 1970s. The company has to construct a 36-kilometre-long tunnel, and the feasibility study shows that the mine can be mined for a minimum of 50 years, if not more. Sirius Minerals wants to construct the project in two phases over a period of five years. It states that the annual profits from the mine will range from US$1 billion to US$3 billion once the mine is completely ready and functional.
The first phase of the project requires US$1.63 billion, which Sirius Minerals hopes to raise through debt and equity. The company revealed that it has approximately £25 million in its bank account, so raising the funds may prove to be a little tough. Also, as of now, potash is trading at an eight-year low, and Sirius Minerals also has to take into account the costs associated with blowouts, which are quite possible in a project as large as this one.
However, mining is performing well in the stock market. Mining companies in the UK and across the world are witnessing a boom, with gold and lithium stocks performing quite well, so if Sirius Minerals can convince its investors, it should be able to raise the necessary funds to get the project off the ground.