A negative tone in the much-awaited planning report on Sirius Minerals' (SXX:AIM) potash project in Yorkshire has spooked the market, sending the shares down 25% to 16.13p. The report says the proposed mine's economic benefits do not outweigh the environmental harm caused by having a large-scale potash operation.
The North York Moors National Park Authority's report doesn't contain a recommendation on whether planning permission should be granted for the mine. As previously flagged, it is up to the Special Planning Committee to make the final decision.
The final vote should be cast on 30 June (when the Special Planning Committee meets) or 1 July. A refusal by the authorities could lead to a lengthy appeal process.
Sirius chief executive Chris Fraser comments: 'We believe our planning case stands up to scrutiny and we remain determined to pursue the positive planning decision that will allow us to deliver this project and all of its benefits.'
There are positive factors in the report which means that Sirius may still have a chance of getting approval. It acknowledges high level of mitigations and that the project could have significant economic and social benefits, together with strong local support – principally because it will generate 2,200 direct and indirect production jobs and over 2,000 construction jobs.
Sirius says the mine would contribute £1 billion annually to UK GDP; £233 million in tax receipts and £48 million in annual local payments.
It wants to extract potash from deep underground. The material would be sent via conveyor belts through a series of tunnels below farm land to a processing facility situated next to a port on an industrial plot that already houses a large Tesco (TSCO) distribution centre and a steel mill.