Sirius Minerals early finance arrangement

Sirius Minerals have announced financing for developing the polyhalite mine in the National Park. This ‘Phase 1 funding’ is for construction of the mine-head and tunnel. It includes a deal with the Australian mining company, Hancock Prospecting Pty, headed by climate change sceptic Gina Hope Rinehart. Other parts of the financing are through a share offer and convertible bond offering. Sirius claim to have raised £352 million from the share offer, but interest payments on the convertible bond will cost around £200 million over the next 7 years. A second phase of funding will have to be raised on the debt market, amounting to US$1.8 billion for building the harbour facilities on Teesside. This continues to be a high risk venture with uncertainties on construction time and exposure to cost overruns.