North York Moors potash company secures £1bn in funding

The plans include building a minehead at Dove's Nest Farm, Sneaton, in North Yorkshire

The company behind plans to construct a potash mine on the North York Moors has secured initial funding of about £1bn.

Sirius Minerals said it had raised enough money to begin construction of the mine near Whitby in North Yorkshire.

Planning permission for the mine and a tunnel to transport the mineral, used in fertilizer, for processing on Teesside has already been granted.

The money has been generated through new shares and convertible bonds.

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The financing was approved by shareholders at a meeting earlier.

Sirius also received a significant investment of £250m from an Australian mining company in October.

Construction costs have been estimated at around £2bn with the balance expected to be met through borrowing.

The tunnel, underneath the North York Moors national park, heads north west to Teesside

Chief executive Chris Fraser said: "This financing today fills out a lot of the front work and finances the shafts from beginning to end.

"The actual first actions on the ground probably won't be until January with the highways work."

Completion of the mine is expected to take around five years and will create 1,000 jobs when in full production.

The plans include building a minehead at Dove's Nest Farm, Sneaton, with shafts 4,921ft (1,500m) deep.

The minerals will then be transported 23 miles (37km) underground to Wilton International near Redcar.

The term "potash" is used to describe a range of minerals containing potassium, with the company mining polyhalite.

Sirius intend to initially produce 10 million tonnes of fertilizer per annum.