January 8 2020 @ 15:29 by Steven Hugill
The future of a 4000-job fertiliser development straddling Teesside and North Yorkshire could be secured after its operator confirmed £386 million takeover talks.
Sirius Minerals is in “advanced discussions” with Anglo American over a proposed 5.5p per share offer.
Any deal would include Sirius’ Woodsmith Mine, which is being built on the outskirts of Whitby, North Yorkshire, to extract the fertiliser polyhalite.
Confirmation of the takeover talks come after Sirius was last year forced to slow construction of its mine, when tough market conditions forced the cancellation of a bond offering and the shelving of a £400 million fundraiser.
The firm subsequently unveiled a two-stage funding plan, which it said would enable the project to reach production, but Anglo American’s bid could now add a fresh angle to those plans.
Describing Sirius’ polyhalite endeavour as a good match for its existing projects, an Anglo American spokesperson said: “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 American believes the project has the potential to become a world-class, low-cost and long-life asset.
“The project has the potential to fit well with Anglo American’s established strategy of focusing on world-class assets, particularly in the context of Anglo American’s portfolio trajectory towards later cycle products that support a fast-growing global population and a cleaner, greener, more sustainable world.
“Anglo American believes that the possible offer could provide certainty to Sirius’ shareholders, whilst Anglo American brings the financial, technical and marketing resources and capabilities to progress the project over time.
“This should also be in the interests of Sirius’ broader stakeholders, including employees and customers.”
Sirius’ plan would see polyhalite moved underground from Whitby to Wilton, near Redcar, for storage, before being exported from a new harbour.
Production has long been expected to begin in 2021, with Sirius saying it believes the development will create 1000 direct jobs and support another 3000 in the construction phase and eventual supply chain.