Belfast Telegraph

Anglo American mulls £390m bid for troubled Yorkshire fertiliser mine

Sirius Minerals ran into problems last year when it could not raise the money it needed to push ahead with its plans.

Sirius plans to drill a mile under the surface for fertiliser in North Yorkshire. (Sirius Minerals/PA)
Sirius plans to drill a mile under the surface for fertiliser in North Yorkshire. (Sirius Minerals/PA)

By August Graham, PA City Reporter

The board of Sirius Minerals is set to recommend a £386 million offer for the company which would leave many investors out of pocket.

The firm, which is trying to build a fertiliser mine in North Yorkshire, said it is in late-stage talks with Anglo American over the 5.5p-a-share offer.

The bid has not yet been finalised but would be ahead of Sirius’s closing share price at 4.1p on Tuesday. Shares shot up by 33% to 5.4p on the news of the offer on Wednesday.

However it still marks a steep climb-down from a year ago, when the price per share for Sirius Minerals was 22p.

“Anglo American identified the project as being of potential interest some time ago, given the quality of the underlying asset in terms of scale, resource life, operating-cost profile and the nature and quality of its product,” Anglo said.

It comes after a tough few months for the miner’s investors. The business has attracted many retail shareholders, individuals who invest their own money. A £100 stake in Sirius in January was worth £18.60 at close on Tuesday.

Sirius was forced to go back to the drawing board in September when it failed to raise enough money to unlock the bank loans it needed to push ahead with its fertiliser project.

The business hoped that a bond sale would allow it to borrow up to 2.5 billion dollars (£1.9 billion) from banks.

It was forced to slow down work on the mine in North Yorkshire after the announcement, and later came back to the market with a slimmed-down plan for how to progress.

The mine would extract polyhalite, a mineral that can be used as fertiliser, which is buried around a mile underground in the North Yorkshire moors. Using a conveyor belt, the mineral would be transported through a 23-mile (37km) long tunnel to Teesside, from where it would be shipped to customers.

Mary Lanigan, leader of Redcar & Cleveland Borough Council, said: “The problems Sirius encountered in raising funds to complete the construction of the mine were a serious blow, but a new investment to allow it to go ahead would be a huge boost for the whole region.

“From the start, the council has been committed to the project and has worked closely with Sirius Minerals throughout. We will continue to support the development wherever possible in the future.”

PA

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