Sirius Minerals, the company behind the £4bn North York Moors polyhalite mine and Teesside processing plant, has confirmed it is in takeover talks with a global mining firm.
Mining giant Anglo American has bid to buy up the cash-strapped fertiliser mine, whose future has been in doubt after Sirius failed to raise cash to unlock funding.
Anglo American said it was in “advanced talks” about a possible “all cash offer” of 5.5p per share.
It would value Sirius Minerals at £386m, which would mean a significant loss for thousands of smaller shareholders.
A statement from Sirius Minerals said its board expected to recommend a firm offer, subject to assurances over worker interests.
Sirius Minerals pulled a £400m fundraising offer in September, blaming market conditions, and slowed the pace of construction on the project, whilst 300 workers were laid off.
The project’s sites include its mine south of Whitby, a Wilton processing plant and a 23-mile underground conveyor system.
The mine, south of Whitby, would extract polyhalite, a naturally occurring fertiliser which is used in agriculture, from a mile underground the North York Moors National Park.
The extracted mineral would be transported via a 23-mile underground conveyor system to a Wilton processing plant, from where it would be shipped to customers.
The mine had originally been expected to open in 2021 and create 1,000 jobs.
FTSE 100 firm Anglo American, which is based in South Africa, is the world’s largest producer of platinum.
It has 28 days to announce a “firm intention” of an offer to Sirius.
Wednesday’s announcement was welcomed by Teesside politicians, with Tees Valley mayor Ben Houchen describing it as “a massive vote of confidence” in the project.
He said: “Anglo American are one of the biggest mining companies in the world and their involvement is a sign they have huge confidence in the quality of the product and will be a big boost for what is a world class project.
“I have always said that the scheme will be delivered and that local people here in Teesside, as well as further afield in Yorkshire, would feel the huge benefits of this truly transformational project.
“We’re not out of the woods yet and there are more details to come, but I am monitoring developments closely and remain in regular contact with Sirius and look forward to more news in the coming weeks.”
Cllr Mary Lanigan, leader of Redcar & Cleveland Borough Council, added: “The mine and the infrastructure to allow the product to be exported will bring well-paid and skilled jobs to Redcar and Cleveland which, in turn, will provide many families with a brighter and more prosperous future.
“Sirius Minerals has also invested heavily in community projects which further benefits the borough.
“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.
“We will continue to support the development wherever possible in the future.”