part time job

Contractors hit as £4bn potash mine suffers funding blow

Contractors working on a £4bn potash mine in Yorkshire will be forced to slow down or halt works after the project was hit by a major funding blow.

Sirius Minerals, which is building the mine, cancelled a $500m (£401m) bond issue yesterday because of “poor bond market conditions”.

The bond launch was previously postponed in August for similar reasons.

Issuing the $500m bonds by 29 October was needed to unlock a $2.5bn (£2bn) credit facility agreed with JP Morgan.

Construction work at the site in North Yorkshire will now be slowed as Sirius preserves its cash flow while seeking new finance.

A spokesman for Sirius said: “We are carrying out a review over the next six months. Some [construction] will be wound down while some will be slowed, with a view to ramping up again when needed.”

The main contractors on site are Careys, which is doing overground concrete work; Strabag, carrying out tunnelling; and Canadian company DMC, which is building the underground mine.

Sirius chief executive Chris Fraser said the company had around £180m in cash left, which would see it through the next six months.

The firm asked the government for a loan guarantee so it can issue up to $1bn (£802m) of bonds, but was turned down.

Mr Fraser said Sirius was now looking at alternative forms of financing for the project.

If the mine is completed it will be the world’s largest producer of polyhalite, which is used in fertiliser.

The mine is being built beneath the North York Moors National Park and will include a 37 km tunnel, which would be the longest in the UK.

Careys declined to comment. Strabag and DMC have been contacted for comment.

The post Contractors hit as £4bn potash mine suffers funding blow appeared first on Construction News.