£386m rescue bid for potash miner
MINING giant Anglo American has thrown a potential lifeline to a multibillion pound scheme to build a fertiliser mine under the North York Moors.
FTSE 100 group Anglo, owner of miner De Beers Group, is in advanced talks to buy Sirius Minerals for £386million in an all-cash offer of 5.5p per share.
Sirius’s shares were trading at close to 40p 18 months ago but have fallen sharply due to financing, leaving tens of thousands of retail investors – including many based in Yorkshire and the Northeast – nursing heavy losses. Last night, shares had jumped 1½p to 5½p.
Sirius was forced to go back to the drawing board in September when it failed to raise enough money to unlock the bank loans it needed.
The mine would extract polyhalite, a mineral that can be used as fertiliser, which is buried about a mile under the North Yorkshire moors.
The mineral would be transported on a conveyor belt through a 23-mile tunnel to Teesside for shipping.
Anglo said it had identified the project as being of potential interest “some time ago, given the quality of the underlying asset in terms of scale, resource life, operating cost profile and the nature and quality of its product”.
It added: “Anglo believes the possible offer could provide certainty to Sirius’s shareholders, while Anglo brings the financial, technical and marketing resources and capabilities to progress the project over time.”
Redcar & Cleveland Borough Council leader Mary Lanigan said: “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.”
AJ Bell investment director Russ Mould said: “Anglo American has appeared as a white knight. Many shareholders will view this as a derisory sum, thinking their investment is worth multiples of this amount. In reality, Anglo is offering what it thinks the project is worth today (plus a small sweetener), not what it could be worth.
“Without a bid, Sirius remains in a very difficult position financially.”