The leader of Scarborough Council has called on the borough’s MP to lobby the Government to secure the future of Whitby’s potash mine.
Cllr Steve Siddons is asking MP Robert Goodwill to insist that the Government step in and safeguard the Sirius Minerals Woodsmith mine project and the jobs it could create.
In response, Mr Goodwill said it was up to the company to show the markets that it had a viable project to raise the money it needs.
This morning the company cancelled plans to raise $500m (£403m) through a bond sale and blamed “market conditions”, including Brexit and lack of government support for the decision.
It will now undergo a six-month review of four different options for a new financing plan to resume the project.
The company’s shares fell by 63% in early trading today.
In a statement, Cllr Siddons (Lab) said: “Earlier this year then Prime Minister Theresa May turned down a request from Robert Goodwill for a Government guarantee so Sirius Minerals could complete construction of the Woodsmith mine and its tunnel towards the port.
“It is time now to ask PM Boris Johnson to reconsider that refusal. A complex four-stage financing plan devised after that refusal that should lead to JP Morgan guaranteeing the $2.5bn needed for completion has stalled.
“It isn’t just future jobs at the mine and on Teesside that are at risk, many of the shareholders are local.
“From Whitby, right across North Yorkshire, small investors have been encouraged to invest in the mine, many local personal pension pots are threatened if this project isn’t fully supported.
“Once again, it is the people and communities of the North who will be devastated by this potential crisis at Sirius.”
The project, which lies in the North York Moors National Park, would be the world’s largest mine for polyhalite.
It had been hoped that the mine would open in 2021 and create more than 1,000 jobs.
Speaking to the Local Democracy Reporting Service, Mr Goodwill said it would be “unprecedented” for the Government to step in.
He said: “I spoke to the Prime Minister on Monday September 2 and he had already been fully briefed and was being kept abreast of the situation.
“For the Government to step in now is almost unprecedented, I can’t think of any cases where start-up businesses have been given this sort of support.
“The last time the company went to the Government, with a different offer than what they have now, they were told they should pursue conventional funding streams and they got JP Morgan to come in behind the project.
“I hope they will again be successful in finding a partner, I think that is the best way forward. The Government looked at it and said it wasn’t the sort of thing it could do, it is a commercial project and if it is a viable project then other companies will back it.
“It was disappointing the Government didn’t come in behind but it told them to go to the market and they got JP Morgan to come in as a bank. The problem has been the bond markets in the US. The US/China trade war was kicking off when Sirius was going to the bond markets and the markets got nervous. I think that was probably the major factor.
“They have given themselves some breathing space to find a partner by slowing down operations and I hope they are successful.”