Anglo American: Yorkshire's Woodsmith mining project will ramp up again ‘no earlier than 2027’, says CEO
The CEO of Anglo American, the firm behind Yorkshire’s major Woodsmith mining project, has said that the company expects the scheme to “ramp up” again no earlier than 2027.
Speaking on a conference call as Anglo American announced its 2024 results, CEO Duncan Wanblad said that a number of criteria would need to be met before the company is able to accelerate the project, adding that 2027 would be the "earliest” that the firm expects this to happen.
This comes after Anglo American announced in May of last year that it was slowing down development on the North Yorkshire-based scheme.
Around 2,000 people previously worked on the Woodsmith mining project, but these numbers are thought to have been reduced to around 1,000. The project is set to eventually mine for polyhalite, a mineral which can be used as a fertiliser.
The move comes amid a major restructure at Anglo American, which was launched last year after the company saw off a £39bn takeover attempt from rival mining giant BHP.
As part of the restructure, the company is undertaking a “simplification” of its portfolio, and working to sell off a number of its assets, including in its nickel and diamond segments. The firm has said it will now aim to focus on copper, iron ore, and crop nutrients.
Speaking on the Woodsmith scheme, Mr Wanblad said: “Unfortunately, we had to slow the project down, and we wanted to make sure we effectively managed to get through major elements of our transformation, but we didn’t stop the project. We are still continuing to spend in the order of $300m (£238m) on the project, which is a significant investment into it.”
Mr Wanblad said that the company has set a number of conditions it needs to meet in order to be able to "accelerate the project execution”.
He added: “The first of these is that we want our balance sheet to be materially reset, and so the incoming proceeds from a lot of these demergers and divestments, and a little bit of time with the new portfolio in terms of revenue generation, is going to be important.
“The second is that we need to complete the feasibility study, and that relies on us gathering some critical data and information. We expect that during the course of this year, that data will be gathered and then we will be able to work out exactly what the capital costs are going to be to completion.
“Thirdly, we've said we will syndicate the project, and we can only syndicate the project when we’ve got a feasibility study far enough advanced, and a clear indication that we will be executing the project ourselves. I expect that will be no earlier than 2027.”
Mr Wanblad added that a major part of the feasibility study into the Woodsmith project would consist of gathering data from the sandstone layer, where the company’s digging is concentrated at present.
Anglo American said that capital expenditure on the Woodsmith project for 2024 was $834m (£661m), up from $641m (£508m) in 2023. It added that capital expenditure for 2025 is expected to be around $0.3bn, and nil in 2026.
Operating expenditure for 2025 and 2026 is expected to be around $0.1bn (£79m) for each year.
Anglo American posted a loss attributable to equity shareholders of $3.1bn (£2.5bn) for 2024, a shift from a profit of $283m (£224m) in 2023.
It also posted underlying EBITDA of $8.5bn (£6.74), down from $9.9bn (£7.9bn) the year prior.