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Around 140 miners will lose their jobs at the UK’s only potash mine because of falling prices and dwindling reserves.

The redundancies at the Boulby mine near Redcar are another blow to the area after its steelworks closed last year with almost 3,000 people laid off.

But ICL also said it would apply to extend the life of the mine for a further 40 years. Its current licence to operate in the North York Moors National Park expires in 2023. It employs around 700 people and announced 220 redundancies and the elimination of 140 contractor posts only last November.

Israel’s ICL will slow the extraction of the remaining reserves of potash because world prices have dropped around 40 per cent since early 2015.

The potassium in potash is a vital ingredient in fertiliser. ICL is switching its focus to polyhalite, another form of the mineral that contains other substances that help plant growth. It comprises sulphates, magnesium and calcium and can be crushed and spread on soil without further processing.

ICL calls it polysulphate and says it will produce a range of products. Peter Smith, ICL’s executive vice-president for potash, said: “When we announced the restructuring of the business last November we made it clear that, given the very limited level of economically feasible potash reserves, we had to move our focus to polysulphate production.” He said it would remain a “significant employer”.

Construction could begin on a new $2.9bn mine just south of Boulby to extract polyhalite within weeks. Sirius Minerals, a listed business, said in July it was close to raising the finance for the project near Whitby. Chris Fraser, chief executive, said it had targeted a start date of September.

The mine shaft will be buried so as not to intrude too much on the protected landscape. Sirius also plans an underground tunnel with conveyors to take the polyhalite to Teesside where it will be crushed and exported.

In July it received consent for the harbour facilities at Wilton. Sirius has said that the price drop does not affect the viability of its business because the price of premium sulphate-rich potash has held up.

Mining remains a dangerous business. In June, a worker was killed in an underground explosion. In August, a contractor was airlifted to hospital after suffering burns in an incident at the site. Boulby is the UK’s deepest mine at more than 1.2km.

David Walsh, deputy leader of Redcar and Cleveland council, said the job losses were “extremely sad news”. But he added: “Once at full production [Sirius] is expected to employ around 1,000 people with more in the supply chain.

“The Sirius tunnelling and shaft sinking is complementary to the skill set at Boulby and I would hope this will be acted on by Sirius and its contractors.”