Sirius and DMC agree shaft construction contract for UK polyhalite project

16 February 2018 (Last Updated February 16th, 2018 16:32)

Sirius Minerals has entered a design and build contract with KGHM subsidiary DMC Mining Services to build four shafts required for a polyhalite project in North Yorkshire, UK. 

Sirius Minerals has entered a design and build contract with KGHM subsidiary DMC Mining Services to build four shafts required for a polyhalite project in North Yorkshire, UK.

Under the deal, DMC will use proven shaft boring roadheader (SBR) for the construction of the deep shafts.

The SBR shaft sinking system was developed by Herrenknecht as an efficient alternative to the traditional drill and blast processes.

DMC has replaced UK-based AMC after the firm failed to finalise commercial terms despite a ‘notice of award’ being signed last July.

Sirius noted that due to prolonged discussions with AMC regarding commercial arrangements, the company had engaged DMC and other shaft sinking companies in parallel to consider alternatives.

Sirius managing director and CEO Chris Fraser said: “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.”

“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.”

It is reported that 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.

Production at the site is scheduled to start in the fourth quarter of 2021.

According to Sirius, selecting DMC may bring forward the start of production by up to six months earlier to May 2021.

The deal will see DMC identify and analyse all opportunities to accelerate the development of the critical path deep shafts and associated infrastructure.

DMC managing director Graham Buttenshaw said: “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 fertilisers to the market earlier than previously planned.”