Plans to build a large fertiliser mine in North Yorkshire have been plunged into doubt after Sirius Minerals revealed issues over funding.
Shares tumbled at the company after the announcement on Tuesday (September 17).
The company will now undertake a strategic review for up to six months to decide the way forward.
Sirius Minerals said due to global market conditions and the uncertainty of Brexit, it was not possible to issue a $500 million bond necessary to finance the project and the UK government had decided not to provide support it had requested.
The Woodsmith Mine would be the first in 45 years and mines polyhalite, used to make potash, and would be situated in the North York Moors national park. It was expected to create more than 1,000 jobs at full production.
Chris Fraser, Managing Director and chief executive of Sirius, said due to the ongoing poor bond market conditions it had not been able to deliver its stage 2 financing plan.
“As a result, we have taken the decision to reduce the rate of development across the Project in order to preserve funding to allow more time to develop alternatives and preserve the significant amount of inherent value in this world-class project.
He added it would now conduct a ‘comprehensive strategic review’ to assess and incorporate optimisations to the project development plan and develop a different financing structure.
“This is the most prudent decision to give the Company the time necessary to restructure its plans to move the Project forward.
“The process will incorporate feedback from prospective credit providers around the risks associated with construction and will include seeking a major strategic partner for the Project.”
NFU combinable crops board chairman Tom Bradshaw said: “It is a disappointing to see further confusion adding to existing uncertainty for growers as the Brexit deadline, which could also have impacts on input availability, fast approaches.
“If we want to drive productivity, we have to make the cereals sector investable.
“With further investment on hold due to government delay around the implementation of E10 Ethanol, it is imperative that ministers take legislative action to allow British growers to deliver more renewable fuel for the nation.
“This is one example where government commitment could secure the long-term future creating long-term jobs and giving growers security for the future.”