Potash Community Fund Q&A

Chris Fraser, managing director and chief executive of Sirius Minerals
Chris Fraser, managing director and chief executive of Sirius Minerals

York Potash has announced it will plough millions of pounds in to local projects with the creation of a community fund.

The firm, which plans to build a potash mine between Scarborough and Whitby, says 0.5 per cent of revenue generated by operation will be donated to a fund, called The York Potash Foundation.

The annual figure will be between £3 million and £9million, all of which will be used to support local projects.

Here Chris Fraser, chief executive of Serius Miners, the parent company of York Potash, explains more by answering questions about the fund.

Q: What is the York Potash Foundation?

A: The York Potash Foundation has been set up to fund community projects and initiatives if the York Potash Project goes ahead. It will essentially be a grant-giving body for the local community and is an organisation limited by guarantee that is currently seeking to register as a charity.

Q: Why are you setting up the York Potash Foundation?

A: As part of our proposed mining activity York Potash will be leasing minerals from local landowners and paying them a royalty when the minerals are mined. This money will provide an extra boost to the local economy, but we also want the wider community and those who are not local landowners to share in the benefits.

Q: What kind of projects will it fund?

A: The Foundation has broad objectives to allow it to fund a huge range of community projects. Individuals and groups will be able to submit bids to it for funding and these will be assessed by the organisation’s Trustees. The stated objectives are to:

Advance education including by supporting projects and training that benefit people from the area of benefit by enhancing their skills;

Promote the general health and well-being of the community;

Advance environmental protection and improvement including by enhancing the local landscape;

Advance citizenship and community development including by improving community facilities to bring people in the area of benefit together;

and relieve those in need because of financial hardship by virtue of being out of work, particularly the long term unemployed, by helping them to gain skills.

Q: What area does it cover?

A: The ‘area of benefit’ is defined as any location within the North York Moors National Park, Scarborough Borough or Redcar and Cleveland Borough. Projects that are closer to the operational area of the York Potash Project will receive greater weight in the decision whether or not to award funding. The Trustees may also chose to allocate a certain percentage of annual funding to projects outside the defined area of benefit or other charities.

Q: How much money will the Foundation have to distribute?

A: York Potash will donate 0.5% of annual revenue to the Foundation. On current assumptions (as

specified in the company’s recent Detailed Scoping Study) this would amount to approximately

£3million per year at the start-up of the mine and up to £9million per year if phase two production

levels are reached. An initial payment of £2million would be made to the Foundation on the

commencement of formal construction. Annual payments would begin after first production

estimated to be in 2017.

Q: How long will the payments be made for?

A: The payments will be made every year that mining continues. York Potash is planning a project that will last for well over 100 years.

Q: What guarantees are there that York Potash will honour these payments?

A: The Foundation will be a separate organisation from York Potash and will be independently run. A contract is currently being drawn up between the two parties which will commit the company to continuing the payments as long as mining continues, even if the management team or owners of the company change.

Q: Who will run the York Potash Foundation?

A: A board of seven (unpaid) Trustees will run the Foundation. They have the right to delegate

decisions and employ a limited amount of staff, but will ultimately be the guardians of the

Foundation. York Potash will have the right to appoint three Trustees, with two independent

‘members’ of the Foundation appointing the other four Trustees. This will ensure the on-going

independence of the organisation whilst ensuring that it retains the objectives initially envisaged

(and set out above) by the York Potash management team.

Q: How will it be overseen / audited?

A: With charity registration (currently underway) the Foundation will be governed by charity law, ensuring that its resources must always be used for the charitable purposes and that its Trustees act in the best interests of the charity. The financial statements of the Foundation will be independent audited and publicly available.

Q: How do I apply for funding?

A: Further details on the Foundation and its policies (such as how to apply for funding) will be published on the York Potash website in due course. The first steps for the Foundation will be to appoint Trustees who will then begin to develop the policies and publish further information.

Q: How do I apply for a job / get involved with the foundation?

A: The Foundation is unlikely to employ any staff before receiving its initial payment (payable by York Potash on commencement of formal construction) and any recruitment plans will have to be determined by the Trustees.

Anyone interested in becoming a Trustee or acting as an independent member of the Foundation should get in touch with Gareth Edmunds at York Potash on 01723 470 010 or email gareth.edmunds@siriusminerals.com