ICL’s UK polyhalite plan: Are Boulby mine’s days numbered?

LONDON (ICIS)–Simon Clarke, the UK member of parliament (MP) for Middlesbrough South and East Cleveland, is on a war footing.

The politician travelled to London on Monday on behalf of 230 workers set to lose their jobs in June 2018, when Israel Chemicals (ICL) switches its muriate of potash (MOP) mine at Boulby in Yorkshire to polyhalite production.

Polyhalite is a multi-nutrient fertilizer found more than 1,200m below the Earth’s surface, under the North Sea along England’s northeast coast.

Conservative MP Clarke’s complaints centre on some £1.4m ($1.9m) in flexible funding held by a taskforce set up in the wake of the closure of SSI’s Redcar steelworks – a neighbour to ICL’s Boulby operation.

The SSI Taskforce, according to Clarke’s Facebook page, intends to release the funds – but was still drafting an official request when a letter from Whitehall, the UK’s centre of government, arrived.

“It is not possible to extend the specific retraining funds and job support schemes that were available to ex-SSI staff, which have all now been committed,” said the letter.

Incensed, Clarke lambasted his own government’s response, saying: “The letter looked as if it was drafted by junior civil servants who really don’t understand what the Taskforce is or what money it has still has available for support. They hadn’t even seen any formal proposals from the Taskforce.”

“230 workers are about to lose their jobs, which could cause untold damage to communities across East Cleveland. They deserve more than a generic fob off letter from Whitehall mandarins.”

I am meeting [Business, Energy, and Industrial Strategy] Minister Andrew Griffiths on Monday to push to get the green light from the Government – and I’ll be fighting hard for our area.”

Clarke’s aggressive response is to his credit – but sources in the MOP industry question whether this latest round of job cuts is the beginning of the end for ICL’s British operations.

ICL’s Boulby facility – which trades as Cleveland Potash – will complete a switch to polyhalite production in June 2018.

However, despite the furore surrounding this latest raft of job cuts, job losses at Boulby are not a new phenomenon: ICL flagged 220 job losses in November 2015, following reports of a reduction in potash reserves at the site, which first opened in 1973.

Added to this slow decline in workforce is the fact that polyhalite is not a particularly well-known mineral fertilizer, and ICL’s marketing of the new product has previously been described by a distributor dealing in competing nutrient MOP as “lacklustre”.

Another source even claimed that “ICL doesn’t understand its own product”.

Added to this slow weakening of market position is the fact that despite its decision to end Boulby’s potash production, ICL retains considerable MOP reserves at the Dead Sea, and is unlikely to suffer any larger impact on its availability, or on its relative “clout” in supply tenders.

There is also the chance that ICL may eventually mothball Boulby as part of recent efforts to streamline its assets, which also featured the December 2017 sale of two “low synergy” business units, netting the company $167m.

Everything points to an eventual closure of the Boulby mine – and although there has been no news since, there was talk late last year that UK-based polyhalite fertilizer start-up Sirius Minerals was in discussions to acquire Boulby, which is situated just 12 miles from Sirius’ own Woodsmith facility.

With its bullish outlook and disruptive marketing plan, Sirius is outwardly punching above its weight in the global chemical fertilizers market.

In fact, executives are firm in the belief that their branded product Poly4 will find a home in the market – but not, as marketing tsar JT Starzecki puts it, “as a ‘MOP killer’”.

“How you market MOP is very different to our approach with Poly4,” Starzecki said last year.

“We’re targeting technical sales – demonstrating an alternative to potash in a blended fertilizer application plan.”

So, perhaps there is hope yet for Boulby.

If Sirius is indeed in negotiations with ICL, the start-up could stand to acquire a ready-made source of polyhalite, as well as the expertise and facilities to extract it, potentially allowing Sirius to ‘test the waters’ before bringing its own, far more modern mine online in 2021.

Alternatively, could Sirius opt instead to close Boulby itself, becoming the UK’s only major polyhalite fertilizer player?

Only time will tell.

Pictured: A safety bolt in Boulby potash mine
Source: ID.8 Photography/REX/Shutterstock

Focus article by Andy Hemphill

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