Sirius Minerals: Financing Volition Live On A Serious Challenge
Sirius Minerals has precisely received approving for their polyhalite (potash) mine nether the North York Moors National Park.
The stock was upwardly most fifty portion yesterday together with the marketplace cap is at 1 time most one-half a billion pounds.
Now they conduct hold the small-scale thing of financing the mine, edifice it together with operating it to specification.
It is a large project. Here is the corporate video:
The mine is roughly 1500 meters deep together with workers require to descend past times rattling long shafts.
The video proposes mining alongside continuous mining equipment (long-wall coal would live an analogy - but coal is never mined that deep).
Longwall equipment is expensive to maintain.
The stone at York Potash looks pretty hard. Moreover deep mines conduct hold all sorts of problems (eg the stone inwards the wall only explodes equally it is depressurised) together with the mines are commonly fairly hot.
Deep mining is - commonly - hard together with expensive. Hard stone leaves high maintenance costs. [Polyhalite is 3.5 on MOHs scale, a lot harder than coal but non genuinely hard.]
Still, according to the fellowship together with its feasibility report this volition live a rattling depression cost mine. The feasibility study gives costs equally follows:
Yes, that is USD36.9 per tonne inwards operating costs. Net of processing at port the cash costs are USD24.9 per tonne.
Now I similar to compare this to atomic release 26 ore operating costs.
Iron ore is pretty elementary to mine. It comes inwards large opened upwardly cutting seams, you lot don't exercise much to it together with you lot charge it onto trains together with thus to a port. Moreover it is done on huge scale - hundreds of millions of tonnes per twelvemonth - which tends to lower cash costs (per tonne) dramatically.
Still York Potash estimated cash costs are most the similar to the West Australian ultra-large rattling depression cost atomic release 26 ore mines. [The linked Sydney Morning Herald article questions the viability of atomic release 26 ore mines at prices around $35 per tonne.]
Sure some atomic release 26 ore mines conduct hold lower cost than that - but the cash costs cited hither are consistent alongside mega-scale opened upwardly cutting mining, non mining 1500 meters underground. The cash costs that York Potash suggest are inwards the make of the lowest cost large scale open-cut mining operations inwards the world.
The management of Sirius came from Fortescue - a giant Western Australian atomic release 26 ore mine. So they must conduct hold learned something about depression cash cost mining.
I am precisely wondering how they exercise it. Because without a reasonable explanation equally to why this is precisely thus inexpensive I am non buying it.
Count me out of the financing. Financing together with edifice something that inexpensive to run is going to live a serious challenge.
John
PS. There is a mine (Boulby) owned past times State of Israel Chemicals operating most the same depth inwards the same area. The cash costs are probable to live inwards the mid-200s per tonne.
PPS. If you lot desire to empathize the challenges of mining hard stone actually deep this Wall Street Journal storey on mining inwards South Africa is instructive. [The proposed Yorkshire mine is most a 3rd of this depth together with in all probability inwards less brittle stone thus the WSJ storey overstates the problems that York Potash powerfulness have.]
This South African mine has thousands of staff together with removes 6,400 tonnes of hard stone per day. By contrast York Potash intends on removing 35,000 tonnes per 24-hour interval at much lower costs.
Still this is what the WSJ has to say:
Whatever, despite extreme depth together with the problems that arise Yorkshire Potash volition non live expensive to operate. The feasibility report suggests this is all going to live done for open-cut mine cash costs.
--
For mine opponents in that location may live no require to lament the conclusion to mine. With this kind of financing together with engineering requirement I suspect the York Moors National Park is fairly safe.
The stock was upwardly most fifty portion yesterday together with the marketplace cap is at 1 time most one-half a billion pounds.
Now they conduct hold the small-scale thing of financing the mine, edifice it together with operating it to specification.
It is a large project. Here is the corporate video:
The mine is roughly 1500 meters deep together with workers require to descend past times rattling long shafts.
The video proposes mining alongside continuous mining equipment (long-wall coal would live an analogy - but coal is never mined that deep).
Longwall equipment is expensive to maintain.
The stone at York Potash looks pretty hard. Moreover deep mines conduct hold all sorts of problems (eg the stone inwards the wall only explodes equally it is depressurised) together with the mines are commonly fairly hot.
Deep mining is - commonly - hard together with expensive. Hard stone leaves high maintenance costs. [Polyhalite is 3.5 on MOHs scale, a lot harder than coal but non genuinely hard.]
Still, according to the fellowship together with its feasibility report this volition live a rattling depression cost mine. The feasibility study gives costs equally follows:
Yes, that is USD36.9 per tonne inwards operating costs. Net of processing at port the cash costs are USD24.9 per tonne.
Now I similar to compare this to atomic release 26 ore operating costs.
Iron ore is pretty elementary to mine. It comes inwards large opened upwardly cutting seams, you lot don't exercise much to it together with you lot charge it onto trains together with thus to a port. Moreover it is done on huge scale - hundreds of millions of tonnes per twelvemonth - which tends to lower cash costs (per tonne) dramatically.
Still York Potash estimated cash costs are most the similar to the West Australian ultra-large rattling depression cost atomic release 26 ore mines. [The linked Sydney Morning Herald article questions the viability of atomic release 26 ore mines at prices around $35 per tonne.]
Sure some atomic release 26 ore mines conduct hold lower cost than that - but the cash costs cited hither are consistent alongside mega-scale opened upwardly cutting mining, non mining 1500 meters underground. The cash costs that York Potash suggest are inwards the make of the lowest cost large scale open-cut mining operations inwards the world.
The management of Sirius came from Fortescue - a giant Western Australian atomic release 26 ore mine. So they must conduct hold learned something about depression cash cost mining.
I am precisely wondering how they exercise it. Because without a reasonable explanation equally to why this is precisely thus inexpensive I am non buying it.
Count me out of the financing. Financing together with edifice something that inexpensive to run is going to live a serious challenge.
John
PS. There is a mine (Boulby) owned past times State of Israel Chemicals operating most the same depth inwards the same area. The cash costs are probable to live inwards the mid-200s per tonne.
PPS. If you lot desire to empathize the challenges of mining hard stone actually deep this Wall Street Journal storey on mining inwards South Africa is instructive. [The proposed Yorkshire mine is most a 3rd of this depth together with in all probability inwards less brittle stone thus the WSJ storey overstates the problems that York Potash powerfulness have.]
This South African mine has thousands of staff together with removes 6,400 tonnes of hard stone per day. By contrast York Potash intends on removing 35,000 tonnes per 24-hour interval at much lower costs.
Still this is what the WSJ has to say:
A deep mine is a truce that volition ever break. Mining at depth makes stone unstable. Every 24-hour interval at Mponeng mine they detonate 5,000 pounds of explosives. Every 24-hour interval they accept away 6,400 tons of rock. The laws of compressive strength dictate that the stone volition endeavour to closed the spaces left past times mining. To foreclose this, engineers backfill stopes alongside stone together with concrete. They trim stone stress at the mining face, "softening" the stone earlier they boom it past times drilling complex patterns around the blasting holes. In 1 deep mine they "fool the rock" past times drilling out six-foot horizontal slots to a higher house the stopes. Since stress propagates through rock, but non through space, the empty spaces hinder the transmission of stress.
In tunnels, yard-long stone bolts anchor the unstable stone on the tunnel roof to the to a greater extent than stable interior of the stone mass. Patterns of stone bolts inserted inwards clusters are said to "knit" the stone together. Wire meshwork together with sprayed concrete stabilize the tunnel walls. Seismic sensors inwards the mine notice tremors at the offset twitch, alert men to exit the stone face.Earlier the article indicated precisely how much strength stone explodes with:
Some of the rockbursts had been thus powerful that other countries, detecting the seismic signature, had suspected South Africa of testing a nuclear bomb.==
Whatever, despite extreme depth together with the problems that arise Yorkshire Potash volition non live expensive to operate. The feasibility report suggests this is all going to live done for open-cut mine cash costs.
--
For mine opponents in that location may live no require to lament the conclusion to mine. With this kind of financing together with engineering requirement I suspect the York Moors National Park is fairly safe.
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