Sirius Minerals Plc (SXX), seeking to build a $1.9 billion potash project in the U.K., dropped to the lowest in almost two years in London trading after announcing it won’t submit planning documents until July next year.
Sirius slid as much as 20 percent to 9.79 pence, the lowest intra-day price since Oct. 5, 2011. The stock was down 16 percent at 10.25 pence at 10:08 a.m. Sirius will submit a combined environmental study covering the project’s mine, pipeline, plant and port instead of first seeking approval for the mine and pipeline, it said today.
The company had previously sought to start building the mine, pipeline and port operation this year pending agreement from the North York Moors National Park Authority. It requested and won a delay to the key planning decision from the authority in July, the same week the regulator was due to make its ruling.
“The revised approach better reflects the wishes of a number of the decision making authorities and key statutory consultees,” London-based Sirius said today.
The U.K.’s only potash mine, Boulby, is north of York. Potash is a form of potassium used to strengthen plant roots and protect against drought.
Sirius’s mine is opposed by some environmental groups and in May the company said it had received objections from the Environment Agency and Natural England. The decision to file a combined environmental study next year followed talk with advisers, the park authority and other regulators, Sirius said. Among issues cited today by Sirius as key in its environmental study are hydrological monitoring and European Habitat Regulations.
The project, known as York Potash, holds the world’s largest estimated resource of polyhalite, with 2.7 billion metric tons of the potash material.
Sirius is yet to arrange financing to fund development of the project. It has sales accords in place with customers.
“Whilst the impact of today’s announcement on the project timeline is a delay, the impact on our valuation is marginal given the back-ended nature of project cash flows,” Liberum Capital Ltd. London-based analyst Richard Knights said in a note. “The new process gives us significantly more clarity and comfort around the permitting process with the new approach having been decided on a collaborative basis.”
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