Sirius Wins Vote; Obstacles Remain
Sirius Minerals has pulled a rabbit out of a hat, winning approval for a vast potash mine in a national park in Yorkshire, sending shares sharply higher in early trading on Wednesday.
Sirius had been placed in a trading halt on Tuesday, the day of an eagerly expected vote by the North York Moors National Park Authority. The Committee voted narrowly in favour of the project by 8-to-7, with economic benefits to the area trumping any concerns over the mine’s environmental footprint.
“This is really just the beginning for the company,” said managing director Chris Fraser, thanking shareholders and customers for their patience in waiting for the decision. “We have made a major step forward and now have a pathway to reaching production.”
To minimise its above-ground impact, the $3bn mine is due to transport production on a 36km tunnel from the mine workings to the coast. Approval nonetheless looked unlikely after a downbeat Committee report was released just two weeks ago.
The market was also betting against Sirius, with shares down 30 per cent since mid-June. On Wednesday they quickly reversed the losses, up 82 per cent to 27.4p.
Analysts were more cautious, pointing to the massive financing obstacles that remain. “Now the company has the minor hurdle of finding $3bn to develop the asset base,” one bank joked to clients. Even after today’s move, Sirius is valued at just £584m ($917m).
Campaigners are meanwhile fuming. “We’re really disappointed,” opponents said in a statement. “This project is completely incompatible with National Park purposes.”