Sirius Minerals to slow down Woodsmith mine construction due to funding issues

Woodsmith mine, near Whitby.
Woodsmith mine, near Whitby.

Sirius Minerals will have to slow the development of Woodsmith mine due to funding issues.

The company behind North Yorkshire's polyhalite project was supposed to issue a $500m bond to fund the next phase of construction.

However, it has announced today that it is not in a position to do so due to "global market conditions", the "ongoing uncertainty surrounding Brexit" and the current political climate.

The company, whose shares fell 55% to 4p in early trading, will now undertake a strategic review to look at other options to secure funding.

In a statement, a spokesperson from Sirius said: "The Board considers that a reduced pace of development focused on key areas of the project that will ultimately serve to preserve the most value for the project will provide the Company with a period of up to six months to review all available options for the Company to move forward. The Group will need to secure additional external financing in order to allow it to continue operations after 31 March 2020."

The company's bond issue, which is necessary to unlock a $2.5 billion revolving credit facility offered by US investment bank JP Morgan, had already been paused last month.

At the time, Sirius blamed market conditions and the negative impact of the trade war between the US and China.