Scarborough Potash – “(Wooly Bully) Jobs A Good’un”

“(Wooly Bully) JOB’S A GOOD’UN”

• – an “In My View” article by NIGEL WARD

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IN THE PUBLIC INTEREST

Following the first of my articles on the fiercely contended topic of the Sirius/YPL development proposals to mine beneath the North Yorkshire Moors National Park (“The Wizard of ‘IF’”), I received some praise for my ‘balanced and measured’ observations, notably from Pro-Sirian readers.

Since the publication of my follow-up pieces (“A Sirius Attempt” and “Void Space Waste Disposal”) the tenor of my ‘fan-mail’ has taken a turn for the worse – I have been accused (by a ‘Landlord’ contractually involved with YPL) of ‘gossipy scare-mongering’ and ‘mischief-making’, for committing the outrageous indiscretion of reporting in good faith on information ‘leaked’ to me in the public interest. How naughty.

Let me remind readers that my start-position on the Sirius proposal is a matter of public record. I commented on an article in a Scarborough Evening News article published sixteen months ago, entitled “New mine could bring 5,000 jobs”, the opening paragraph of which reads:

•  “MINERAL rights between Scarborough and Whitby have been sold in a move which could lead to the opening of the first UK Potash mine in 40 years and the creation of up to 5,000 jobs.”

‘Up to’ FIVE THOUSAND jobs . . . sufficient to fundamentally advance our local economy.

I commented on that story in these terms:

• “If (repeat – IF) this all works out, it is the single most positive piece of news to reach Scarborough, Whitby and the North Yorkshire coastline for a very, very long time. A natural resource with an assured market in China and India (the most dependable markets in the world for the next generation or two). Escape at last from reliance on the UK’s pitiful dependence on tourism; this will fund the regeneration of all kinds of local businesses and public works. Please let this not go the way of the BS about how the wind-industry was going to do for Whitby what oil/gas did for Aberdeen.”

My emphasis on ‘IF’ duly noted, I think readers will agree that my stance was one of cautious optimism, entirely consistent with my “The Wizard of ‘IF’” article.

Clearly, my perceived position has changed – or why else am I suddenly receiving snotty emails from those who have already swallowed the Sirius bait hook, line and sinker?

The truth is that the deeper I delve into the documents, the more concerned I become that the press releases and glossy brochures are withholding more than they actually disclose.

About those 5,000 jobs, for instance . . .

In the SEN article cited above, Robert Goodwill MP (Con), Scarborough & Whitby, is quoted thus:

“This is absolutely brilliant news as this investment could create one of Scarborough’s largest employers. We have been saying there will be private sector jobs that come and replace some of the losses in the state sector and this could see that happening in Scarborough with thousands of jobs.”

Turning now to one of the many documents ‘leaked’ to me, a text document entitled “Completion of York Potash Detailed Scoping Study” (DSS), and watermarked DO NOT CIRCULATE on every page, we encounter some very different information. This document closely resembles the downloadable Adobe.pdf DSS document available on the Sirius web-site, though it contains additional information.

But let us address the published version, released on the Monday (30/04/2012) immediately following the publication of my “A Sirius Attempt”  article – in particularly, the following.

• York Potash is planned to be developed in a phased approach:

• § Phase 1 is planned to reach production of 5mtpa of Polyhalite ore producing 1.4mtpa of SOP by 2018; and

• § Phase 2 to increase the mining and processing capacity to match the installed shaft hoisting capacity of 15mpta of Polyhalite ore producing 4.1mtpa of SOP by 2024.

How big a work-force would it take to pull all that ore out of the ground by [quote]:

• “Conventional underground mining of Polyhalite to take place 1,400 – 1,600m below the surface in a location between Whitby and Scarborough in the United Kingdom”.

Sirius projections (plus/minus 35%, remember!) indicate a Phase One (2017-2020) annual average SOP production (once on-stream) of 1.4 million tonnes per annum, extracted at a labour cost of US$10.5/tonne – a total per annum of US$14.7 million, or roughly £9.1 million (at today’s exchange rate).

How many miners would that amount to, at (say) £22,000 gross per annum?

414. Four hundred and fourteen.

That fits fairly well with the following extract from the Sirius DSS document:

“York Potash has the potential to be one of North Yorkshire’s largest employers. At the end of Phase 1, York Potash will employ over 700 people with approximately 430 jobs being at the mine.”

But how many miners would that be – working about a mile below the surface, in ambient temperatures of 85° Celsius, remember – calculated at a more realistic salary of, say, £40,000 gross per annum?

TWO HUNDRED AND TWENTY-EIGHT!

Either way, we are a long way short of the much-trumpeted ‘thousands’.

Of course, there should be office staff and drivers and engineers and analysts not down the mine. According to the DSS, 270 of them. And where are those jobs scheduled to materialise?

The DSS tell us:

• Ore transportation via buried pipeline from the mine to a processing plant and port facilities in Teesside; and
• All products, SOP, Epsomite (Magnesium Sulphate) and Gypsum sold directly to customers via road, train or ship from Teesside.

Now that certainly does not tally with Robert Goodwill’s assurances about this all “happening in Scarborough with thousands of jobs”, does it? No. Not by forty-odd miles.

I wondered what credentials one would need to land one of these four-hundred-and-odd (or two-hundred-and-odd?) potash mining jobs and what sort of money they might realistically expect to command, so I consulted “Potash&Phosphate.com” – who describe themselves as “the Number 1 Source for Potash and Phosphate investor intelligence” – and I came across an article entitled “Two Potash Mines, One Workforce and Digging for Assets in the UK”. It did not resolve my query, but it did tell me something important. I will quote the relevant passage here:

• “Libertas Capital Corporate Finance said in a research note this week that “one of the arguments for Sirius being allowed to develop a potash mine in the North York Moors National Park was the new all-year-round employment opportunities that would represent.”

• “Libertas said the fundamental problem with that argument is that unemployed hotel workers in Scarborough aren’t exactly trained to operate mining equipment in a deep, hot, dry, underground potash mine (Well, maybe the kitchen staff would flourish….). Anyway, this posed a very real risk that a skilled workforce would have to be imported from Poland, which Libertas says defeats the mining jobs argument.” ”

• “ “The solution is, of course, to cannibalise (Cleveland Potash’s) Boulby Potash workforce, and Sirius have just made a start by recruiting that company’s managing director,” Libertas said. “He has been mining potash there for 26 years, and has commissioned Boulby’s polyhalite extraction project. In addition he is fully aware of the safety issues associated with the mining of potash; something that Sirius has not previously exuded confidence that they know much about.””

• “So, what we have here is a turf war between a 35-year-old operating mine (Boubly)[sic], which is in close proximity to an eager new start-up in need of experienced manpower.”

• “In other words, we’ve got two mines and one legitimate workforce. ”

So “the Number 1 Source for Potash and Phosphate investor intelligence” reckons “two mines and one legitimate workforce”, eh? Kidnapping jobs is not exactly creating jobs, is it?.

So what does the Sirius DSS document have to offer in response to that?

Only this:

• “York Potash will recruit locally whenever possible. Work has already begun in collaboration with Scarborough Borough Council to develop a coherent and evolving education and skills programme.”

‘Recruit locally whenever possible’. IF ever possible.

And it is unclear what part Scarborough Borough Council might have to play in that. Contrary to the Sirius assertion, SBC is not the Education Authority for our region – that specific duty rests with North Yorkshire County Council.

Meanwhile, PotashCorp (the industry world-leader) will be doubling output with a new $1.7 billion mine in Sussex, New Brunswick (Canada), on-stream from 2015. Sirius needs to find $2.7 billion to get on-stream by spring 2017.

So, in my view, it all begins to look rather woolly. Perhaps that explains why I am beginning to pick up the rich perfume of organic fertilizer around here – of the bovine variety.

More soon . . .

“Matty told Hatty: “That’s the thing to do.
Get you someone really to pull the wool with you.”
Wooly bully, wooly bully.
Wooly bully, wooly bully, wooly bully.”

[Sam the Sham & the Pharoahs – 1965]