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UPDATE - Sirius Minerals' plans for conveyor significantly reduces potash project's environmental footprint

Sirius Minerals has unveiled a new plans for transporting polyhalite from its York Potash Project in North Yorkshire that not only improve the economics of the operation, but, crucially, reduce its environmental impact.
UPDATE - Sirius Minerals' plans for conveyor significantly reduces potash project's environmental footprint

--ADDS MANAGEMENT COMMENT, SHARE PRICE AND LINK TO Q&A DOCUMENT---

Shares in Sirius Minerals (LON:SXX) were lifted Wednesday after it unveiled new plans for transporting polyhalite from its York Potash project in North Yorkshire that not only improve the economics of the operation, but, crucially, reduce its environmental impact.

The group on Wednesday outlined its blue-print for an underground conveyor-based system, known as an MTS, that will transport the fertiliser from mine-site to port via five linked, 7.5km mining tunnels.

This would replace the previously proposed pipeline.

The beauty of the new option is it reduces construction disturbance by 70%. Specifically, there will be a “dramatic” drop in the environmental impacts of York Potash Project.

Meanwhile, the construction of the giant conveyor system removes all direct construction from designated and protected habitats.

This is compared to the 13 hectares required for the construction of the pipeline.

As the project is sited in a national park, so addressing environmental concerns will be key when the group re-submits its planning application.

However the change also improves the projects long-term economics, reducing costs by around US$10 a tonne while allowing for expanded output.

Capacity in phase-one would rise 1.5mln tonnes a year to 6.5mln tonnes and then to 13mln tonnes in phase-two. The additional cost is put at US$280mln, which represents 15% increase.

Managing director and chief executive Chris Fraser told Proactive the new system would reduce operating costs by around a quarter and reduce the number of buildings at the mine head in the national park by about 70%.

"It allows us to remove all construction frokm designated environments so it's a real positive from a construction impact standpoint."

Earlier, Fraser said: "Combined with the strong international demand for polyhalite, the change to the MTS in terms of the lower operating costs and an increase in phase-one production could result in an increase to the initial project value by over US$1bn."

News of the new transport system was welcomed by MP Ian Swales for Redcar, near where the handling plant and port facilities will be sited.

"This is fantastic news as it will bring jobs to our area while keeping inconvenience and disruption to a minimum.

"This solution almost completely removes the need for over ground construction and protects our beautiful countryside."

Sirius shares rose 1.92% to stand at 13.25p.

Sirius recently updated the question and answer document on its mineral transport system.

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