Sirius Minerals 2018

Benefitz Betty's picture

To Boldly Go ...  "12 January 2018  Sirius Minerals Plc : Quarterly progress update 

Safety : - The project recorded one lost time incident during the period.  As the organisation expands the Company is proactively engaging with all staff and construction partners to communicate its safety culture and Company values.

Cost and schedule : -The project remains on track to deliver first polyhalite and commercial production on time and on budget.  Current diaphragm walling ("D-walling") activities are approximately two months behind schedule following some delays in commissioning the D-walling equipment and some adverse weather conditions during the latter stages of the quarter.  The Company is confident that this small loss of time will be recovered over the remainder of the project schedule.

Permitting : - The conditions clearing process continues to function smoothly with all relevant conditions satisfied for the ongoing scopes of works at all locations. The application for 'minor material' amendments to the original planning application was unanimously approved by the local planning authority.  This approval covered the previously highlighted changes to the foreshaft and surface layout designs at the Woodsmith site.    

Site preparation : - The site preparation scope of work at the Woodsmith and Lockwood Beck sites is substantially complete.  A number of minor activities remain ongoing and will be completed in 2018.  At Wilton, site clearance and the removal of vegetation is underway to enable construction activities to commence.

Geotechnical investigation : - The production shaft geotechnical borehole, SM14B, is nearing the polyhalite horizon with drilling and testing complete to 1,329m.  Geotechnical and hydrogeological work continues to support and refine parameters used in the shaft design and construction methodology.  The mineral transport system ("MTS") seismic survey is nearing completion and continues to provide excellent quality data to support engineering activities.  MTS drilling is ongoing with the majority of the scope completed.  Over 2,500m of core has been recovered, logged and sub-sampled to confirm the geotechnical parameters required for detailed MTS design.  Current activities are focussed on the Wilton Portal and the MTS caverns at Lockwood Beck.

Shaft sinking : -  D-walling activities are progressing smoothly with three rigs operating on the services shaft.  Six panels are in progress or have been completed with a total of 48 panels required to complete the foreshaft for the services shaft.  The D-walling scope of work is approximately two months behind schedule due to delays in commissioning and adverse weather conditions across the quarter.  The Company is confident of recovering the lost time over the remainder of the project schedule.  Once D-walling activities are completed, excavation and fit-out of the foreshafts and surface basements will commence.  Preparation for these activities is progressing well, including contractor procurement and engineering. The Company is still working to finalise the shaft sinking contract.  This activity is the key focus of management's attention and all avenues are being explored to ensure a shaft sinking contract will be executed as soon as possible and the impact on the overall construction programme is minimized. 

Other project activities : -  Procurement activities for the MTS are well advanced with a view to commencing initial construction activities in 2018.  The Company is working closely with a number of parties in relation to the commercial terms associated with the tunnelling scope of work.  Front end engineering and design work for the port and materials handling facility ("MHF") is now underway and Sirius is engaged with a number of potential delivery partners.  The Company is also pursuing port outsourcing opportunities with potential partners and this process is progressing well. 

Commercial activities across all scopes of work are scheduled to be substantially complete by the middle of 2018 in order to facilitate the completion of the stage 2 financing process.   

Agronomy, sales and marketing : - During the quarter, the Company announced the signing of a binding take-or-pay offtake agreement with Wilmar International for the use and resale of POLY4 exclusively in South East Asia.  Wilmar is a leading global agribusiness with the capacity to reach a diverse customer base through well-established, trusted relationships.  The Company is continuing negotiations with a variety of potential customers in multiple regions to expand its commercial reach into new markets.  POLY4 continues to gain market acceptance globally from both industry participants and experts.  The Company has initiated 28 new agronomy trials.  The overall programme now encompasses over 260 trials on 32 crops in 17 different countries.

Corporate : -   Activities relating to the stage 2 financing process will gather momentum as the coming year unfolds.  The Company is intending to re-engage with the bank group during the first quarter by issuing a comprehensive due diligence information package.  This is the first major milestone in the timetable which is aiming to have commitments in place during the second half of 2018.     

* Review of 2017 milestones demonstrates good progress - The Company set out key milestones for 2017 at the beginning of that year.  Performance against these milestones is summarised below:  

Complete site preparation works at Woodsmith Mine and Lockwood Beck - Status: Complete•     Site access works complete.

•     Haul road, drainage, concrete batch plant and general infrastructure complete.

•     Site welfare facilities installed and operational.

•     MTS and reinjection pads complete.

* D-walling progress slightly behind schedule - Substantially complete D-wall installation for production and service shafts - Status:  Partially complete - approximately two months behind schedule

•     Scope of D-walling activities was substantially increased with the change to wider foreshafts.

•     Progress on production shaft has been deferred to allow for the SM14B drilling programme.

•     Delay is estimated by comparing progress against like for like scope (total m2 of panels).

Progress design activities for MTS and front-end design for harbour and MHF - Status: Complete

•     MTS scope of work at advanced commercial discussion stage with multiple contractors.

•     Design scope for MHF and overland conveyor complete and out for commercial tender.

•     Port outsourcing opportunities are being negotiated in parallel with internal design and build process.

* Wilmar offtake agreement signed - Execute incremental offtake agreements  Status: Partially complete

•     Offtake agreement signed with Wilmar International for South East Asia.  Seven years, peaking at 0.75 million tonnes per annum.

•     Commercial discussions for other key regions (Europe, Brazil, China, Africa) progressing well.

•     On track for stage 2 financing requirements.

Expand breadth and depth of the agronomy programme - Status: Complete•     260 trials on 32 crops in 17 countries.

•     Over 60 new trials commenced during the period. 

* The project remains on track to deliver first polyhalite and commercial production on time and on budget

Seek a Premium Listing and move to the Main Board  - Status: Complete

•     Premium Listing obtained in Q2.

•     FTSE 250 inclusion obtained at half year index re-weighting.

•     2017 total shareholder return of 24% vs 14% for the FTSE 250.

Preparation work for stage 2 financing execution in late 2018 - Status: Complete

•     Key advisors appointed and due diligence programme well advanced.

•     In principle agreement reached with IPA in relation to structure and financing process."

"In the minimal gravity environment of the International Space Station, astronauts often get taller as their spines expand..."

Rustle Rustle.

Ah, so ....




Benefitz Betty's picture


"“The company continues to evaluate opportunities to accelerate components of the shaft and tunnel spend to further de-risk the implementation of the construction project, and potentially create opportunities for shortening the project schedule.

“Some shaft design optimisations have now been incorporated into the development plan and options to bring tunnelling activities forward are in commercial discussion with the preferred tunnelling contractor.”

Murphy and Hochtief had expected to start work on the main tunnel in 2019 but this may be advanced into next year."

"The 7.85m diameter tunnels were constructed using Herrenknecht slurry shield TBMs and were successfully completed fifty days ahead of schedule. Pre-cast tunnel segments were manufactured in a specially built factory on site.

The approach structures comprised significant cut and cover works, including 25m deep launch and reception chambers for the TBMs. The works comprised diaphragm walls and in-situ reinforced concrete base and roof slabs.

The existing site was marshland and a dewatering system was installed to enable construction of the approach structures. The system pumped in excess of 500 litres per second, to achieve up to 30 metres of drawdown.

The project was carried out in joint venture between HOCHTIEF and Murphy and received a Tunnel Industry Award 2003 for innovation and engineering excellence."


Benefitz Betty's picture

Sirius Minerals : Tunnels

"Skills, experience and attributes

  • Practical tunnelling experience is required for this role – ideally 15 years’ experience on similar works.
  • Experience working on at least three tunnel projects (with at least one working on the client side).
  • Understanding of the technical aspects of tunnelling and different tunnelling methodologies – specific experience of segmental-lining tunnelling using tunnel boring machines (TBMs) is essential.
  • Understanding of the human, organisational and cultural aspects of a tunnelling project and the ability to deliver results in this environment.
  • Experience of being the named employer’s representative and the first point of contact for similar contracts.
  • Qualified in mining, civil engineering or a similar applicable discipline. 
  • Closing date  23/01/2018"

"We love having the wolf sanctuary as neighbours and hope this beautiful creature is returned safely soon."


Benefitz Betty's picture

SXX: Hotchief & DMC

"Sirius Minerals Plc ("Sirius" or the "Company") announce that it has entered into a design and build contract with DMC Mining Services UK Ltd and DMC Mining Services Ltd, both subsidiaries of KGHM Polska Miedz SA ("KGHM"), for the construction of the four shafts required for its polyhalite project in North Yorkshire.  DMC Mining Services ("DMC") is one of the world's leading shaft sinking and mining contractors.

Sirius has been in extended discussions with AMC UK Ltd ("AMC") in respect of finalising the shaft sinking contract following the "notice of award" in July 2017 which anticipated execution of a finalised contract shortly afterwards.  Due to protracted discussions with AMC regarding commercial arrangements Sirius engaged with DMC and other shaft sinking companies in parallel to consider alternatives.

Through this process, it has become clear that DMC, with their extensive and proven shaft sinking experience, are a strong construction partner for Sirius and will bring technical opportunities and a commercial partnership that can unlock potential savings in the construction schedule.  Sirius has therefore entered into a design and build contract with DMC and has terminated ongoing arrangements it had for the shafts with AMC.

Chris Fraser, Managing Director and CEO of Sirius, comments:

"Sirius continually seeks opportunities to use innovations and a commercial approach to accelerate development and unlock value. DMC has proven, world leading experience using Herrenknecht SBR technology on deep shafts and represents a strong partner, commercially aligned to our success. We are confident that they can deliver the North Yorkshire polyhalite project shafts significantly earlier than all previous expectations and we look forward to working with the team."

Graham Buttenshaw, Managing Director of DMC, comments:

"We are excited to be partnering with Sirius on this world-class project and are confident of leveraging our leading technology and experience to accelerate development of the mine and enable Sirius to bring its sustainable multi-nutrient fertilizers to the market earlier than previously planned."

"Analyst conference call

Sirius Minerals' Chief Executive Officer, Chris Fraser, will host a conference call for investors and analysts at 10.00 am today.  The call can be listened to live, by dialling +44 (0)330 336 9411 and entering the confirmation code 6224490.

About DMC and KGHM

DMC is one of the world's leading shaft sinking and mining contractors.  DMC has been operating for over 35 years and has sunk 23 shafts with one of the lowest incident / accident frequency rates in the industry.  Amongst other projects, it is currently the main contractor for the construction of the two 1,000 metre deep potash shafts at the BHP Billiton Jansen project using the Herrenknecht Shaft Boring Roadheader ("SBR") system.

KGHM is a diversified mining Company based in Poland with operations in Europe, North and South America.  Listed on the Warsaw Stock Exchange, KGHM has a market capitalisation of approximately US$6bn and its major shareholder (32%) is the Polish State Treasury.  KGHM currently employs approximately 34,000 people worldwide.  In addition to DMC's experience, KGHM has constructed 31 shafts in Europe. 

Further information on the companies can be found at and

Improved shaft sinking methodology

DMC will utilise proven SBR systems for the construction of the deep shafts for Sirius.  The SBR shaft sinking system was developed by Herrenknecht as a highly efficient alternative to the traditional drill and blast processes.    

DMC has in-depth knowledge of the SBR system and the procedures for operating it efficiently and effectively, incorporating significant improvements learned from recent projects.  Based on their extensive experience, DMC are confident that shaft sinking rates with the SBR are significantly faster than what is possible with conventional methodologies. 

Based on the current status of the development programme in North Yorkshire and the procurement timelines for the SBR's required for the Sirius project, DMC and Sirius are confident there are real opportunities to achieve the first polyhalite milestone up to six months earlier (i.e. May 2021) than currently planned.  Under the terms of the shaft sinking contract DMC are incentivised to work to identify and analyse all opportunities to accelerate the development of the critical path deep shafts and associated infrastructure.

Contract scope and structure

The commercial arrangement with DMC is based on a risk / reward model, with financial incentives for completing the scope of work under budget and ahead of Sirius' base schedule (first polyhalite Q4 2021), and financial penalties should completion be late or above the target price.  The target price of DMC's scope is consistent with the allocated project budget and the target dates are within the dates outlined in the existing project schedule.  The delivery of the project in line with the accelerated schedule discussed above would result in significant profit bonuses for DMC.

The cost of this work is expected to be incurred in a similar combination of currencies previously articulated with the addition of some exposure to the Polish Zloty.

Change of contractor

AMC was the preferred shaft sinking contractor for Sirius since June 2016 and was provided with a notice of award in July 2017.  Discussions to finalise the contract with AMC became protracted through the second half of 2017.  As a result, Sirius approached a number of alternative contractors including DMC to create options and also potential opportunities to improve on the commercial and technical proposal presented by AMC.

DMC has proposed a significantly more efficient and safer shaft sinking solution and the commercial terms and risk sharing contained in the contract with DMC are a more appropriate alignment of incentives for project partners.

The Company has now served notice on AMC in relation to the shaft sinking scope.  This notice includes transition and novation arrangements around the engineering and design work undertaken to date, on-site activities including the drilling of SM14B and operation of the concrete plant, and the main winders which are being procured from a related entity of AMC. 

Due to the prolonged nature of the discussions with AMC, Sirius has already taken steps to prevent any impacts on the project schedule.  This includes the direct contracting and delivery of site preparation and D-walling, and the direct engagement with a preferred contractor for the near surface civil construction activities.  These steps have meant that the delay in finalising the main design and build contract for the shafts has not negatively impacted the project schedule prior to entering into this agreement with DMC and the acceleration opportunities discussed earlier. "

How Dynamic.

Safety First.

Captain Black's picture

Shaft Boring & The Ready to Rumble

Updates from Sirius Minerals :

Stage II financing to be confirmed by Q3.

Purchase of Port facility.

Enhanced marketing team & substitution of product placement

The East & West Coast of the USA now on the 'Torp'  map ;-)

(POLY4 to address global nutrient requirement Slide 8)

Oh, OK: -

Captain Black's picture

SXX: Some Missing Links