CASH-strapped Sirius Minerals has agreed a £405m takeover deal with global mining giant Anglo American.

The agreement, announced by the two firms today, Monday, would provide a lifeline to the struggling North Yorkshire fertiliser mine and Teesside processing plant which is building the UK's biggest mining project in a generation.

Anglo announced earlier this month that it was in advanced talks about a bid for Sirius.

In the deal, Anglo will pay "a recommended cash offer" of 5.5p per Sirius Minerals share. This values the company at £404.9m. It was once worth more than £1.5bn.

The board of Sirius has recommended the deal.

Anglo has said it could provide a huge boost to the area in terms of jobs and the economy.

Bosses at Sirius said the company would go into liquidation within weeks with huge job losses if it did not go ahead. 

“We intend to bring Anglo American’s financial, technical and product marketing resources and capabilities to the development of the project, which of course would be expected to unlock a significant and sustained associated employment and economic stimulus for the local area,” said Anglo chief executive Mark Cutifani.

Sirius Minerals is the company behind a £3.2billion fertiliser mine near Whitby. 

The Press reported in 2011 how Sirius Minerals plc had bought the mining project from York Potash Ltd, which was investigating the technical viability of introducing the first new deep potash mine in Britain for 40 years.