Sirius shares drop as local authority casts doubt on potash project

LONDON, June 18 (Reuters) - Shares (Berlin: DI6.BE - news) in Sirius Minerals (Other OTC: SRUXF - news) , which aims to develop a potash mine in northern England, fell by almost a third in early trade on Thursday after a local authority said its project would be more harmful than beneficial to the local area.

The AIM-listed company is aiming to develop a new potash mine near Whitby in North Yorkshire, but needs approval of local authorities to go ahead with its plans.

The North York Moors Park Authority committee published on Thursday a report in which it said it believed the economic benefits, mitigation and compensation did not outweigh the harm that would be caused by the project.

The report, however, did not contain any official recommendation to the Park Authority members who will vote on Jun. 30 on whether the economic benefits outweigh the project's impact on the park landscape.

The stock pared early losses and was trading down 3.5 percent by 1016 GMT but was still underperforming a roughly flat FTSE AIM Basic Resources index

Analysts at Liberum said they still believed the most likely outcome of the Jun. 30 vote would be in favour of the mine developer. (Reporting by Silvia Antonioli; Editing by Mark Potter)