England Getting Sirius about Potash
Posted by Cheryl Rutledge on 8/4/2015 2:37:22 PM
Kristine Ramsbottom, Taylor Jackson, and Kenneth P. Green
On June 30th the North York Moors National Park Authority (NPA) in England made the final decision to push forward York Potash mining Project, which had been proposed to be located in the North York Moors National Park, near the town of Whitby.
Sirius Mining, the company that owns and is operating the project, estimates that it will be one of the largest Potash mines in the world once it is operating at full capacity. They have been working on this proposal since 2011, and estimate the mine to produce approximately 13 million tonnes of polyhalite annually.
The project itself will take five years to construct and Sirius is pledging to make sure it has as little environmental impact on the park as possible. This promise materializes in the form of a negligible visible existence of the mine once complete, which will allow the park to remain almost unchanged for above ground viewers. In addition, the company is providing the tourist destination with annual compensation funds to help offset any loss in tourism due to disturbances in the park derived from the mine’s estimated five year construction.
Despite this reassurance, the project has faced considerable push back from park activist groups and concerned local community members who are uncomfortable with having yet another mining project in the heart of their protected lands. There are currently 29 environmental and non-profit groups protesting the project, led by the Campaign for National Parks.
Sirius has responded by outlining their low impact plan especially designed to preserve the integrity and natural habitat of the park. They also estimate that this project will have substantial economic benefits to the community and country as a whole. Predictions forecast that the mine will create over 1,000 permanent jobs and boost the North Yorkshire economy more than 10 percent when operating at full capacity.
England currently ranks as number 10 out of the Top 10 global Potash Producers. In light of the news that the NPA has allowed the York Potash Project to go through, England’s global production ranking could increase significantly based on its estimated increase in output.
England currently produces 470,000 tonnes per annum, showcasing the impact that this project’s production could have in improving their global ranking. The York Moore project is estimated to provide extraction of 2.7 billion tonnes of polyhalite over a projected 40 year lifespan.
If England were to become one of the next major Potash producers, it could alter the global landscape considerably for investors interested in this industry. According to the Fraser Institute’s 2014 Annual Survey of Mining Companies, China and Russia, both jurisdictions that precede the UK in Global potash production, face serious policy issues, one in particular surrounding political stability.
The survey results ranked Russia 61st of 122 jurisdictions and China 97th of 122 on the Investment Attractiveness Index. Both have received lower rankings compared to the responses of the 2013 Survey.
When considering political stability, 26 percent of respondents indicated that it is perceived to be a mild deterrent to investment, 21 percent a strong deterrent, and 11 percent indicated that this factor would lead them to not invest in China’s mining industry
Of the respondents regarding Russia, seven percent perceived political stability to be a mild deterrent to investment, 43 percent a strong deterrent and 21 percent found this to be a barrier to not invest in Russia’s mining industry.
According to survey responses to additional questions in the 2013 Survey, public opposition can play an important role in investment decisions for a given jurisdiction. Respondents were probed as to whether public opposition to mining was affecting the permitting and /or approval processes for any projects their companies were directly involved with. Over 36 percent of companies agreed that public opposition to mining had affected their permitting and approval process.
Of the factors considered in the survey that the public opposed, 59 percent were under the heading of environmental or water usage. These are concerns that Sirius faced with its public opposition for the project. In this case, however, the project managed to survive the community activist’s environmental platform that opposed the progress, a potentially positive policy indicator for future investment in the region.
Given these findings, with the North York Moore project now passed, England’s emerging presence in the global Potash market may provide investors with more stable investment opportunities.
Top 10 Global Potash Producers
- United States
- United Kingdom