UK potash project remains attractive, despite Uralkali move: Sirius

15 August 2013 16:39  [Source: ICIS news]

LONDON (ICIS)--Sirius Minerals’ planned York potash project in the UK remains attractive, despite recent market uncertainty over international potash prices, the chairman of the UK-based firm said on Thursday.

Russian potash major Uralkali announced last month it would withdraw from its joint export sales venture with Belaruskali and expand its own potash production while accepting price reductions, a move many market observers believe will dampen long-term prospects for potash prices.

However, Sirius chairman Russell Scrimshaw said that the company's project in north Yorkshire would be low cost and therefore remain competitive, even if long-term potash prices should fall.

"Our polyhalite product is positioned advantageously in the market compared to traditional potassium chloride. It is absolutely saleable and, critically, the expected returns on the project, even at potentially reduced long-term prices, remain very attractive," Scrimshaw said.

Scrimshaw said that it was too early to foresee the longer-term effect on the industry of Uralkali’s move.

"Should [Uralkali’s] statements be followed by actions, then it would be contrary to past behaviour by Uralkali where it has managed production volumes to the benefit of better pricing," he added.

Earlier this week, Sirius announced that it had secured additional funding for the York potash mine project. If realised, the project could initially produce 5m tonnes/year of granulated polyhalite. Polyhalite is a mineral compound from which sulphate of potash (SOP) can be produced.

In related news, Germany-based potash major K+S has also said that it will continue to pursue developing its potash project in Canada’s Saskatchewan province, despite the market uncertainty created by Uralkali's move.

Additional reporting by Deepika Thapliyal


By: Stefan Baumgarten
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