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Sirius Minerals reports "excellent progress" of polyhalite mine

sirius minerals update

Sirius Minerals has reported that construction of its polyhalite mine development in North Yorkshire is on track to deliver production on time.

In its quarterly progress update for the period to 30 September 2018, the firm said that the project remains on track to deliver first polyhalite and commercial production in 2021 and that procurement has been substantially completed for the major construction packages - a pre-requisite for stage two financing.

Earlier this month a design and build contract with Strabag was signed for the remaining mineral transport system (MTS) drives and an engineer, procurement and construction contract was signed with Jacobs for the construction of the materials handling facility (MHF) at Wilton.

Sirius said that it was in advanced negotiations for the remaining scopes of work which includes the MTS fit-out and the port facilities and it had identified Strabag as its preferred contractor for the MTS fit-out. Sirius currently expects that the costs of the outstanding procurement contracts will be in line with its original estimates.

During the quarter, Sirius reported it had revised its capital cost estimates for the project based on the procurement contracts that have been finalised and the associated risk allocations of the contracts.

The cost of developing its new polyhalite mine will rise by up to US$600M (£464M) due to increased scope of the tunnelling work, and the cost of the MTS has risen from US$858M (£664M) to US$1.46bn (£1.13bn) due to the addition of caverns to the tunnelling design and transfer of risk to the tunnelling contractor.

The final funding requirement, and consequently the budget to completion, will be determined following the lending group’s commercial review of procurement contracts and its assessment of the required capital contingency, the firm reported.

Sirius CEO and managing director Chris Fraser said: “The business made excellent progress during the third quarter of 2018, achieving a number of key milestones. Procurement is now substantially complete for the major construction packages including the Strabag AG agreement for the mineral transport system.

The update included details of the diaphragm walling activities on the service shaft are complete and the excavation of the service shaft foreshaft is now underway and is expected to be completed later this year. Three diaphragm walling rigs are in operation on the production shaft and activities are progressing smoothly, the firm said.

Drone footage showing progress across all three construction sites.

Excavation of the production shaft foreshaft is expected to commence in the fourth quarter of 2018, and The Vertical Sinking Machine (VSM), which will be used to sink the MTS access shaft to 120m, has arrived at site and is preparing to be launched.

The MTS portal construction at Wilton, which will facilitate the launch of the MTS drive 1 tunnel boring machine, remains on track for completion in 2018 ahead of the TBM delivery at site in early 2019, reported the firm. The initial 125m of MTS Drive 1 will be a shotcrete lined tunnel development section and will be constructed using civil engineering excavation techniques. The SCL section will advance the tunnel to a depth where the geology is appropriate to launch the TBM.

Design work for the MHF earthworks is complete, and earthworks are scheduled to commence in the coming weeks.

At Lockwood Beck, construction of the MTS intermediate access shaft is progressing well, with surface and basement works ongoing to prepare for the sinking of a slightly larger diameter shaft that facilitates the launch and operation of the drive 2 TBM.

Earlier this month Bachy Soletanche was awarded a £4M contract for the geotechnical work associated with the intermediate shaft at Lockwood Beck, which will provide access to the tunnel that will contain the mineral transport system.

Fraser added: “The coming months are a pivotal period for the company as we work towards fully financing the construction of our world-class long-life polyhalite project.”

In May, GE visited the site. Read how developing the UK’s deepest tunnel and longest shafts has called for some innovative thinking and a flexible approach here.

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