York & North Yorkshire

North York Moors potash mine hit with funding setback

Worker at the mine construction site Image copyright Reuters
Image caption The plans for the under-construction mine include a minehead at Dove's Nest Farm, Sneaton, in North Yorkshire

A fertiliser mine being developed in the North York Moors has suffered a setback after a bond aimed at raising money for the project was pulled.

Sirius Minerals announced plans last month for the bond, worth £410m, to help fund the potash mine, but the sale was halted due to "market conditions".

It is hoped the mine, near Whitby, will open in 2021 and create more than 1,000 jobs.

Sirius Minerals said it would "revisit the market" when conditions improved.

The project is set to be the world's largest mine for polyhalite, which is used in agriculture, but cash funds are needed to unlock a $2.5bn (£2bn) loan to secure the project's future.

Opponents have said the mine and its operations will damage the landscape and harm wildlife.

The plans include a 23-mile (37km) tunnel to transport minerals to a processing plant on Teesside.

Image copyright Sirius Minerals
Image caption Minerals would be transported underground to a processing plant on Teesside

Claire Shaw, from SYZ Asset Management, said: "This has been an ongoing saga for about a decade. They've had to overcome environmental opposition, there's been concerns about the demand prospects for potash and long battles to raise capital.

"The company is potentially going to run out of cash by September if they don't issue this bond; they're saying they've got about two months to sort it out."

Shares in Sirius Minerals fell after it said it was pulling the bond sale.

In a statement, the company said: "The company intends to revisit the market when conditions have improved later this quarter."

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