Showing posts sorted by date for query sirius. Sort by relevance Show all posts
Showing posts sorted by date for query sirius. Sort by relevance Show all posts

Sunday, 28 June 2020

‘...the rotten heart of the UK planning system’

A former senior policy adviser to the prime minister, Rohan Silva, has claimed that planning corruption is “endemic” in councils across Britain...
“The depressing truth is that corruption is endemic in Britain’s bureaucratic planning system. In every corner of the country, you can find stories of bribery, with local councillors and officials rigging the planning process for their own gain.”
The subject has recently reared its ugly head again. It centres on one minister:



How much further does it go?

The trouble with planning decisions is that they can seem arbitrary, which means merely matters of opinion. Possibly corrupting factors can always be at play.

“The planning system has historically cast developers and politicians in poacher and gamekeeper roles. But in recent years an increased focus on financial negotiations between public authorities and developers has made simple yes/no decisions into more complex transactions, sparking concerns the system lacks transparency and is vulnerable to corruption.”
Developers have raised their eyebrows at Desmond’s admission that he directly lobbied Jenrick – seeing it as something of an own goal.
“As a developer the last thing you do is talk to the secretary of state because you get into exactly this [controversy],” said one. “You know not to get anywhere near the politicians.”
At a council level, it is different. Council leaders and planning committee chairmen can be approached before planning applications are submitted. Developers know they have something councils badly need: cash.
The pressure on councils to use planning to deliver funds to invest in public services had only been increased by austerity, said Nick Johnson, a former director of the Manchester-based property developer Urban Splash, making them “alert to the opportunity of planning deals to prop up their finances”.
“There’s a real tension,” he said. “You have to question whether they are being completely objective about the decisions they are taking.”
And you can see why:

In a BBC interview defending Jenrick earlier this week, business minister Nadhim Zahawi said that voters who wanted to raise planning issues with their MPs could likewise go to a Conservative fundraiser.
Sue Hawley of Spotlight on Corruption said: “It's time for a serious review of conflicts of interest in UK planning.
“It is entirely wrong that those with money can gain access to politicians that puts their interests above the rest of us,” she told openDemocracy.
A previous openDemocracy investigation found that Leader’s Group donors had given more than £130 million to the Conservatives since 2010. Previous commitments to publish lists of attendees have not been kept. Earlier this year, the Tories scrubbed details of previous Leader’s Group meetings off the party website.
Back in 2012, we posted how Aggregate Industries had donated £150k to the Conservative Party's Leader's Group, despite "unprecedented difficult operating conditions" that meant the company had to delay payments to drivers.

Planning corruption couldn’t be happening in the mining and minerals industry, could it?

Departmental registers reveal a meeting on 21 March 2018 between Jenrick, who was then exchequer secretary to the Treasury, and Ofer, the ultimate owner of the UK mining company Cleveland Potash.
At the time, Jenrick was assessing whether to offer state support for a new potash mine being built by a rival company, Sirius Minerals, which was set to provide intense competition to Ofer’s loss-making business.
A spokesman for Jenrick said he recused himself from any decisions on the Sirius project, but did not say when. The Guardian understands that Jenrick retained oversight of Sirius Minerals’ application for financial support from the Treasury for at least six months after his meeting with Ofer in March 2018.
One of Ofer’s other UK firms, the Mayfair-based Quantum Pacific UK Corporation, subsequently donated to the Conservatives for the first and only time, giving the party £10,000 in March 2019.

In September 2019, Sirius Minerals revealed that the government had refused to provide financial support, a decision that effectively left the company on the brink of financial collapse.

Sirius was eventually bought out in a cut-price deal by the mining firm Anglo American in January 2020, wiping out the shareholdings of hundreds of small investors. Some lost most of their life savings due to the collapse, which Sirius Minerals has said would not have happened if the government had supported the project.
The tale of Sirius Minerals has been the subject of various posts on this blog.
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Thursday, 9 January 2020

Sirius Minerals

Sirius Minerals – the UK’s largest mining project, and subject of various posts on this blog – has recently suffered funding problems, and now finds itself on the receiving end of a takeover bid:


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Tuesday, 26 November 2019

HGV movements at Straitgate would be 70% higher than UK’s biggest mining project

Aggregate Industries' proposal to quarry Straitgate would generate up to 216 HGV movements a day.

To put that number in context, let's look at the biggest mining project in the UK: the Sirius Minerals project to extract polyhalite at its mine at Dove’s Nest Farm in the North York Moors National Park.

The project has recently run into problems. Now – earlier than expected in an effort to 'de-risk' the project for investors – the plan is to transport the fertiliser above ground, from the Woodsmith Mine near Whitby to Teesside. According to TeessideLive, Sirius Minerals plan to bring polyhalite to Teesside by lorry – but only 63 journeys allowed a day:

Planning permission is already in place for Sirius HGV vehicles to make 63 return journeys a day, along the A171 and into Teesside.
It was sought by the firm from the outset to cover an interim period between reaching first polyhalite and building the remaining infrastructure needed to transport it underground.
the worst case scenario of 127 daily HGV movements 15.6.5
By contrast, the number of HGV movements that would be generated by Aggregate Industries if quarrying were to proceed at Straitgate are up to 70% higher – part of the route on a B road as little as 5.3m wide.
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Wednesday, 18 September 2019

It’s really not going well for UK mining projects

There have been two large mining projects in the UK in recent years – both have run into trouble.


Yesterday, there was further bad news for Sirius. It has failed to secure the £400m needed for the next phase of development, after the government refused to provide support. Sirius has only enough cash to last six months. Its shares fell by almost 60%. In an effort to save the mine, the company will wind down construction work and as it seeks to find a partner or alternative financing.

Chris Fraser, Managing Director and CEO of Sirius, blamed "poor market conditions" and Brexit:
Nearly every meeting we had in July and August, every single investor asked about Brexit.



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Tuesday, 6 August 2019

Another UK mining project in trouble


After the disaster last year, when the Australian mining outfit and owner of the Drakelands tungsten and tin mine in Hemerdon near Plymouth, Wolf Minerals, ceased trading and appointed administrators – losing £100 million and leaving a scarred landscape in need of restoration in its wake – now another UK mining project is in trouble.

Sirius Minerals has suspended a $500m (£410m) fundraising due to "current market conditions" – effectively putting financing for its massive polyhalite mine on hold.
The company, which is building a £2.5bn mine and Teesside processing plant, says it has enough cash to keep building at its current pace until September.
Yesterday, the FT was already predicting that Sirius Minerals would have to pay a high price for such funding – "more than 13 per cent"; as one portfolio manager said "a high-risk project finance deal masquerading as a high-yield bond":
London-listed Sirius needs to raise $500m from the debt market so that it can unlock a $2.5bn revolving credit facility (RCF) being provided by JPMorgan and complete development of the Woodsmith mine, one of the largest civil construction projects in the UK.
As the FT reported last year – when the miner needed a further $400m to $600m in financing after being "armed with a better understanding of local geology":
Woodsmith is the largest mine to be built in the UK for a generation. The project involves sinking two 1.5km shafts below a national park on the North York Moors to access a massive deposit of polyhalite.
Many groups and campaigners had objected to such an intrusive proposal in a National Park:
An open letter signed by 29 different groups, including the Caravan Club, the RSPB and the Campaign for National Parks, was sent to the national park authority, whose own internal report stated that the economic benefits of the mine did not outweigh the environmental damage it would cause.
As one investment website now puts it:
...in reality, Sirius is at last coming face to face with an unpalatable truth. Because it’s so big, at least in terms of UK mining projects, half of London’s mining investment community have become beholden to it in terms of fees or the hope of future fees.
That’s given the company a distorted vision of its own prospects for success, not to mention leading a fair few investors astray too.
But just look at the company’s share price over the past year or so. The shares have lost more than a third of their value in the past year. They were down more than 31% today at the open. The market knows what’s what.
Whether it’s “current” or not.
Sirius Minerals looks like joining the long list of mining companies that over-promise and under-deliver.

Sirius is the brightest star in the night sky... [however] There is little light at the end of the tunnel for Sirius investors. The stock has dropped 70 per cent during the past year. If the financing fails, Sirius could always seek a deep-pocketed investor such as Australian mining tycoon Gina Rinehart. But that might wipe out ordinary shareholders. Sirius has begun to resemble another astronomical phenomenon more than a star: a black hole.

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Wednesday, 24 July 2013

Tesco and Aggregate Industries - what on earth could they have in common?

Are all big companies the same? What for example do Aggregate Industries and Tesco have in common? Well, more than you would think.

We have already established that AI takes - from the ground and communities, but does not give anything meaningful back. Donations of 0.02% of sales mathematically rounds to zero. Meanwhile Tesco's boss, Philip Clarke, was recently quoted as saying "We were hearing that Tesco has got to put in more [to society] because people think that all we do is take out". Tesco claims it wants to change, and has a new "core purpose" added to the list on its boardroom wall - "We use our scale for good". AI on the other hand thinks it is just a matter of presentation, promotion, marketing, spin - its Chairman recently calling for the quarrying industry to do more to promote itself to the public.

But there are other similarities. Both have been no good for farming - an industry in crisis, with 30 dairy farmers quitting in April alone. Invariably, any new quarrying application has the word "Farm" in there somewhere - and let nobody claim that soils will be better following any restoration that may or may not happen. Tesco and other major supermarkets have also been devastating for farms, with tough contracts forcing many to quit and moving the UK's food self-sufficiency from 70% in the early 1990s to nearer 50% now. Tesco again wants to correct this, Philip Clarke saying "We've got to produce more food at home and we've got to make better deals with producers". That won't be easy with AI and friends digging up farmland everywhere.

Closer to home, both companies have also been accused of "sharp practices". AI by flouting planning conditions at Hillhead, and Tesco only yesterday by setting up a marquee selling "summer essentials" in its car park in Ilfracombe, without planning permission, angering local shopkeepers. Tesco too has applied for retrospective permission, but can carry on in the meantime, says North Devon Council, until permission is either granted or refused.

No doubt people can think of other similarities. Pile it high, sell it cheap etc. But it can be different. Companies can do good. Companies can give back. The application by Sirius Minerals for the York Potash Project in the North York Moors National Park has been mired in controversy and debate about its economic merits and environmental impact, and has been delayed yet again. But whatever the arguments, or maybe because of the arguments, the company is pledging to give back. Not AI's 0.02% of sales but 0.5% of sales - 25 times more. And it doesn't stop there. A Section 106 agreement would see £13m put into a range of community measures - tree planting, promoting tourism, road improvements and educational projects. Sirius Minerals is even paying for three displays from the Red Arrows for the annual Whitby Regatta whilst construction takes place.

Whether Sirius Minerals is buying off the community or making a serious effort to do the right thing, something would at least be flowing back to the North York Moors and the region suffering most impact - not least by creating about 1,000 jobs and paying tens of millions of pounds in royalties to landowners. At a market capitalisation of £270m the company is not small, but Holcim, AI's parent, is almost 60x bigger. AI gave back just £164k in 2011 - it's most recent figures - 5% of the figure paid to Holcim's boss in 2012. It needs to think about giving back something more significant to the communities it affects. AI would surely have more chance of persuading people of the merits of quarrying by doing so, than by any amount of spin and self-promotion.
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