Anglo American agrees to buy Sirius Minerals
It appears that Anglo American will return to mining fertilizers after it announced that it had agreed to purchase Sirius Minerals for £405 million ($527 million).
Sirius Minerals has struggled to launch the first deep mine in the United Kingdom in 40 years.
The companies revealed that they were in advanced talks over a deal that would hand the struggling fertilizer miner to Anglo for a price of 5.5 pence a share, which valued the company at £386 million ($502 million). Sirius Minerals was once valued at more than £1.5 billion ($1.9 billion).
The Guardian reported that under the deal, Sirius shareholders – including about 85,000 retail investors – and employees will receive a total of £405 million ($527 million) for the company.
Sirius attracted thousands of investors from the Yorkshire area who supported ambitious plans to develop the multibillion-pound Woodsmith potash mine to become the world’s biggest producer of polyhalite.
Sirius has already raised £920 million ($1.2 billion) to develop the Woodsmith Mine but needs a further £2.9 billion ($3.8 billion) to complete the plans, which include two mineshafts drilled just under 1.5 km (1 mile) into the ground and a 37-km (23-mile) underground conveyor belt to transport the mineral from the Yorkshire Mine to Teesside for export.
Russell Scrimshaw, the chairman of Sirius, said he understood that the board’s decision to recommend the deal would have “come as a shock” but argued that the takeover bid was “the only viable proposal” to save the project.
Sirius employs 1,200 staff and its project would create 2,500 additional high-earning jobs in the future. But the mine was plunged into doubt last year after Sirius shelved a £400 million ($500 million) bond issue, blaming factors such as a lack of government support and Brexit uncertainty.
Mark Cutifani, the chief executive of Anglo American, said the takeover would offer greater certainty for Sirius’s shareholders, employees and wider stakeholders.
“We intend to bring Anglo American’s financial, technical and product-marketing resources and capabilities to the development of the project, which of course would be expected to unlock a significant and sustained associated employment and economic stimulus for the local area,” he said.
The takeover would mark a return to fertilizer mining for Anglo, which has owned phosphate assets but in recent years has focused on mining copper, iron ore, diamonds and platinum.
Photo: Inner service shaft at the Woodsmith Mine, September 2019. Credit: Sirius Minerals.