Tough production knocks profits at Cleveland Potash

Poor production conditions knocked revenues at Cleveland Potash in 2012, when turnover slipped 15% to £162m

Cleveland Potash
Cleveland Potash

Poor production conditions knocked revenues at Cleveland Potash in 2012, when turnover slipped 15% to £162m.

The mining firm dropped £24m in sales on the previous year and also saw operating profits slip to £8.3m from £38.7m. annual accounts for the year ended December 31 show.

In its annual accounts, filed recently at Companies House, the firm said its trading performance had been affected by poor potash panel conditions and tough production circumstances, but optimism has returned towards the end of year and has continued after the arrival of new machinery and another 164 employees.

For the third year running, another cold winter over 2011/2012 also saw high demand for road deicing salt and to meet demand the company again sourced the product from its subsidiary mine in Spain.

Investment was also made in salt miners, mining equipment and exploration drilling equipment, resulting in record levels of salt road advance rates and a drilling record of more than 100,000 metres.

A continuing capital expenditure programme saw the order of a new rockshaft tower, which arrived at Boulby this summer, to significantly increase its maximum production potential.

Earlier this year the company, whose parent firm Israel Chemicals Ltd (ICL) will invest £300m into underground equipment in the next five years, announced plans to extend working and effectively create a new mine at its Boulby site and it has recently created 200 more jobs and extended the life of its mine by 40 years. The company supplies 60-70% of the market for potash, which is essential for food growth, but it said it could supply 100%.

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