Sirius Minerals got a $300 million boost for its potash project in the United Kingdom when Gina Rinehart’s Hancock Prospecting agreed to invest in the fertilizer project in Yorkshire.
Sirius Minerals estimates that the first phase of the project will cost $1.1 billion and when it is complete the project will produce 20 Mt/a (22 million stpy) of a potassium-rich mineral called polyhalite, a type of potash fertilizer described by Sirius as a “fertilizer of the future”.
The Financial Times reported that the deal with Sirius would mean Hancock is paying $250 million for the rights to 5 percent of the gross royalties on the first 13 Mt of Sirius’s fertiliser sales every year, and 1 percent above that level. Hancock would also put $50 million of equity into the project.
Rinehart said: “This project delivers a new and natural product that is relevant to Hancock’s focus on agriculture, and after years of field tests and across many crop types, demonstrated improved yields.
“Sirius has a large, high-quality mineral resource and is located in a stable jurisdiction with a competitive tax rate. The project 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.”
The mile-deep mine shaft was narrowly approved in June 2015, by eight votes to seven, after a protracted four-year planning wrangle that drew opposition from conservationists.
The project was supported by 93 percent of local people who wrote to the council, 81 percent of whom live in the national park, The Guardian reported.
Hancock Prospecting was started through royalty payments from iron ore mines that were discovered by Ms. Reinhart’s father, Lang Hancock. Last year Ms Rinehart realized an ambition to have her own iron ore mine, which started production after $11 billion of investment.
The group has moved more into agriculture in recent years and is involved with a bid for Australia’s largest cattle farm, which has attracted controversy because of the involvement of a Chinese partner.
Sirius said the deal with Hancock was similar in structure to arrangements with holders of mineral rights in Yorkshire, and would run for at least 70 years.
Sirius has previously said it hoped to start building its mine this year. It obtained planning permission last year after an inquiry into its plans for mining under the North Yorks Moors National Park.