One of the world’s richest women has agreed a deal to invest £245m in the UK’s biggest potash mine with the potential to create more than 1,000 jobs between facilities at Whitby and Teesside.
Sirius Minerals is set to build the £1.7 billion potash mine near Whitby together with a processing facility at Wilton, near Redcar.
The project, which was given the go-ahead last year after a protracted planning battle, received a major boost on Tuesday when Sirius Minerals, the company behind the mine, announced a $300m deal with Australian agricultural firm Hancock Prospecting.
Hancock is owned by Australia’s richest woman Gina Rinehart.
The mine, which sits on the moorland overlooking Whitby and Robin Hood’s Bay, aims to produce up to 20 million tonnes a year of a potassium-rich mineral called polyhalite, a type of potash fertiliser described by Sirius as a “fertiliser of the future”.
Under the deal Rinehart will purchase $50m of Sirius shares and pay $250m for a 5% royalty stream on the first 13m tonnes of fertiliser produced by the mine annually, and the right to purchase up to 20,000 tonnes of product each year for use on her expanding Australian agricultural holdings.
Ms Rinehart said: “Sirius has a large, high quality mineral resource and is located in a stable jurisdiction with a competitive tax rate.
“The project and has the potential to become one of the world’s leading producers of multi-nutrient fertiliser, and could have a life of 100 years. This fits with my approach of investing in strategic areas for the long term.”
Chris Fraser, managing director and chief executive of Sirius, said: “We are delighted to have signed this agreement with such an experienced party in the mining industry, as well as one that has very successful and strong leadership and a long term and growing agricultural interest.”
The royalty agreement will run for at least 70 years.
Once at full production, the giant project is expected to employ more than 1,000 people – with hundreds or possibly thousands more jobs created indirectly.
All mined polyhalite will be transported underground on a 23-mile conveyor belt running underneath the North York Moors national park to a handling facility in Teesside.
The materials handling facility at Wilton will consist of the plant and equipment necessary to granulate the polyhalite and create the final product.
Although work is yet to start on the mine near Whitby, the deal is a further boost for the project, which received approval for its harbour facilities at Teesport in July.
All major approvals for the project have now been granted.
In June, Sirius Minerals told investors that the estimated cost of construction had fallen 18%, from £2.7bn to £2.2bn.
Our picture depicts how the Sirius Minerals harbour will look when construction is complete.