34 1GM Monday August 3 2020 | the times
Business
$1 billion on the plan, but the company’s
future was cast into doubt when it failed
to secure the $3 billion of financing
required to finish the project.
At their height in 2016 the shares
were worth 46p, but they fell in value as
doubts grew about the mine’s prospects.
A rescue materialised this year in a
takeover bid by Anglo, the FTSE 100
company. It offered only 5½p per share,
however, meaning that many investors
lost a lot of money.
Sirius said in its annual report that
non-executives on its remuneration
committee, which was chaired by Lord
Hutton of Furness, a former Labour
business secretary, had “exercised their
discretion” in early March and had ap-
proved the vesting of all outstanding
long-term share awards granted on or
after May 2018. The schemes before
that date automatically vested on a
change of control of the business.
The payments were made in April. Atthe 5½p offer price, Mr Fraser would
have received almost £900,000 and Mr
Staley more than £590,000. Mr Fraser
was also paid a £417,000 annual bonus
for 2019, which represented about
86 per cent of his salary; Mr Staley re-
ceived £279,000, equivalent to 82.5 per
cent of his base pay.
Both men now have senior positions
at Anglo.
A spokesman for Anglo said that the
long-term incentive programme “was
set up to benefit most employees across
Sirius Minerals and actually more than
90 per cent of the value went to those
employees across the company”.
He added: “Decisions on remunera-
tion were taken by the remuneration
committee of the board of Sirius, in line
with the remuneration policy approved
by 80 per cent of Sirius’ shareholders at
the May 2018 AGM, and prior to the
completion of the acquisition by Anglo
American.”1
Wage growth in London has
been overshadowed by the rest
of the country in the past two
decades as surging rents in the city
absorbed more of workers’ pay,
according to research. A report by
the Institute for Fiscal Studies
found that regional pay inequality
had narrowed since the early
2000s, but wealth inequality had
continued to rise as house prices
in the capital soared. Page 22
Millions of people are set to
save an average of £85 a year
on gas and electricity bills
from the autumn, according to
Eon, one of Britain’s leading
suppliers. A fall in wholesale
energy prices this year is expected
to reduce standard tariffs by about
7.5 per cent in October. Page 43
TikTok is drawing up plans to
break free from Bytedance, its
Chinese owner, in an attempt
to prevent the US government
banning the popular video-sharing
app. Page 334
Liz Truss, the international
trade secretary, has insisted
that parliament is “entirely
able” to block post-Brexit trade
deals, despite warnings from
government backbenchers that
their counterparts in Washington
and Brussels will have a greater
say. Page 335
Four years after approval was
granted for the Hinkley
Point C nuclear power station
being built by EDF, of France, and
CGN, of China, the budget has
risen from £18 billion to between
£21.5 billion and £22.5 billion. EDF
says that there is a risk that first
power may be delayed until 2027,
adding £700 million in costs. Now
political tension with China poses
a new threat.6
Two former top bosses of
Sirius Minerals — Chris
Fraser, who was chief
executive of the fertiliser miner,
and Thomas Staley, finance chief
— shared almost £2.2 million in
bonuses, according to its accounts,
before its sale to Anglo American
inflicted heavy losses on many
retail investors.7
Britain should prepare its
courts for a flood of
bankruptcies in the next few
months and needs to liberalise its
insolvency system to prevent
viable businesses from going bust,
Randall Kroszner, a senior
American economist and
policymaker, has warned. Page 368
The Bank of England has
been warned against a big
increase to its quantitative
easing scheme by Lord King of
Lothbury, the governor who began
its money-printing programme
more than a decade ago. Page 369
The sale of a £400 million
stake in inter-city express
rolling stock running on the
main line between London King’s
Cross and Edinburgh is set to be
given the go-ahead. Page 3610
The world is crying out
for a coronavirus vaccine,
but does saving the lives
of millions mean the profit of a
lifetime for the world’s giant drugs
companies? The sensitive issue
was addressed last week by Pascal
Soriot, chief executive of
Astrazeneca. Page 38Need to know
Two former top bosses of Sirius
Minerals were paid almost £2.2 million
in bonuses before it was sold to Anglo
American in a deal that inflicted heavy
losses on many retail investors.
Chris Fraser, 46, who was chief
executive of the fertiliser miner,
received about £1.3 million and Thomas
Staley, 39, the finance chief, was paid
more than £870,000, according to its
accounts.
Sirius’s board approved the payouts
under long-term share award schemes
a fortnight before the takeover. The
sums, reported by The Mail on Sunday,
are likely to anger the thousands of
investors who lost out in the sale.
Sirius attracted an army of retail
shareholders with its ambitious project
to develop a mine under the North York
Moors to produce polyhalite, a type of
potash fertiliser. It spent more thanBen Martin Senior City CorrespondentSirius directors paid £2.2m in bonuses Consumers
lead ‘tentative
recovery’
Callum JonesHopes of a rapid economic recovery
have been boosted by a steady increase
in household confidence as shoppers
return to the high street.
A widely followed index suggests
that consumer confidence has returned
to positive territory for the first time
since Britain was paralysed by the
Covid-19 pandemic in the spring.
Confidence rose 1.7 points to 100.8
last month and business activity also
continued to rise, according to research
by YouGov and the Centre for Econom-
ics and Business Research. Breaching
the 100 barrier is an encouraging sign
for growth, since a reading above thisNo let-up in heavy lifting at
The first thing you notice as you
approach Hinkley Point C is the sea of
cranes. There are dozens of them,
jutting into the Somerset sky from the
site where EDF, of France, and CGN,
the Chinese state nuclear group, are
building Britain’s first new nuclear
plant in a generation.
One stands out: a 250 metre-tall
yellow beast known as “Big Carl”. It is
the world’s largest crane and is central
to the companies’ battle to deliver the
project successfully.
Hinkley Point C’s twin reactors
should produce enough electricity to
meet 7 per cent of Britain’s needs. Given
the go-ahead in 2016 at a cost of £18 bil-
lion, the plant was slated to generate its
first power before the end of 2025. Yet
with projects to build the same type of
reactor elsewhere in the world plagued
by cost blowouts and delays, critics
have long doubted EDF’s promises to
build Hinkley Point “on time and on
budget”.
Sure enough, four years on, the
budget has risen to between £21.5 bil-
lion and £22.5 billion and EDF says that
there is a risk that first power may be
delayed until 2027, adding £700 million
in costs; thanks to disruption from
Covid-19, that risk is now “high”.
Last week, The Times was allowed on
site to see how the companies are trying
to learn lessons from previous projects
and keep Hinkley Point on track.
In two enormous cylindrical tempo-
rary buildings, or “bunkers”, steel
casings for the reactors are being
welded in giant sections. When a part is
completed, Big Carl — capable of lifting
up to 5,000 tonnes — will pick it up and
swing it across the site so that it can be
slotted into place on the reactor.
“These bunkers didn’t exist in
Flamanville,” Stuart Crooks, the EDF
executive who manages Hinkley Point,
said. Flamanville, the French prototype
of the Somerset reactor, is running a
decade late and more than three times
its original budget. “All of that work was
done on the reactor, whereas here we
prefabricate the piece then move it with
the crane.” The advantages of pre-
fabrication are said to be threefold,
comprising improvements in quality, in
safety and in schedule. Parts are manu-
factured in factory conditions and
workers can carry on constructing
other parts at the same time. They do so
armed with tablet computers that bear
a 4D model of the plant, designed to
avoid misalignments.
When The Times visited, a liftingframe 46 metres in diameter was
suspended from Big Carl, ready to lift a
170-tonne steel liner that will sit
beneath the second reactor. Mr Crooks
said that the project had learnt not only
from Flamanville but also from work on
the first reactor — this second liner was
built 30 per cent more quickly — and
while steel reinforcement bars for the
concrete base of the first unit were
fitted “by hand” on the first reactor, for
the second, they, too, were prefab-ricated. “In ten days we completed
work which cost us ten weeks on unit
one.”
Mr Crooks, 55, joined the nuclear
industry in July 1986, three months
after the Chernobyl disaster that still
fuels opposition to the technology. “I
thought, ‘I’ve got to make sure it never
happens again.’ That’s what I devoted
my whole career to.”
Part of the reason that Hinkley Point
is so costly is down to design featuresintended to prevent such a disaster
occurring here — from the steel liner to
contain radiation in the event of an
accident, to the reinforced concrete
walls designed, post-9/11, to withstand
impact from aircraft.
Changes to accommodate UK-spe-
cific “instrumentation and control”
system and other requirements have
been one factor pushing Hinkley
Point’s costs up. Mr Crooks said that
fitting the first-of-a-kind instrumenta-Behind the story
I
n 2016, when Hinkley
Point C was approved, the
government said that it
would be the “first of a wave
of new nuclear plants”
(Emily Gosden writes). Yet of five
other projects planned around
Britain, three have been shelved
after Hitachi and Toshiba, the
Japanese developers, struggled to
finance their huge costs.
Big questions remain over the
other two, proposed by EDF and
CGN: a sister station to Hinkley
Point, at Sizewell in Suffolk; and
a plant at Bradwell in Essex using
Chinese technology — a
controversial proposition as
British relations with China sour.
EDF and CGN invested in
Somerset because of a
government contract under
which consumers would pay a
high price for the electricity the
site eventually generates. This
has been widely criticised as costs
of technologies such as offshore
wind fall and the government has
said that subsequent reactors
must be substantially cheaper.
The French group says that
Sizewell should cost 20 per cent
less to build than Hinkley Point
because of replicating the design.
However, a viable funding model
has yet to be agreed. The
government has considered a
“regulated asset base” model
proposed by EDF, but this would
put consumers on the hook for a
share of any cost overruns at
Sizewell. At Hinkley Point, the
subsidy contract does at least
shield consumers from the
increase in construction costs.
Ultimately, Stuart Crooks, of
EDF, said, “the government
needs to decide if it wants
nuclear or not”.Emily Gosden Energy Editor