Woodsmith Project: Anglo American prioritises investment in £7bn Whitby scheme as global cuts made

Its massive North Yorkshire scheme known as the Woodsmith Project to mine for crop nutrient-containing mineral polyhalite is included in its capital expenditure plans for the next three years and is unaffected by the cuts plan.

Duncan Wanblad, Chief Executive of Anglo American, cited crop nutrients as an area of investment which will to help secure long-term growth for the business.

The company’s Woodsmith Project involves the creation of a new mining site near Sneaton to the south of Whitby and a 23 mile tunnel that will transport a naturally occurring mineral, polyhalite, to new processing and shipping facilities on Teesside.

The product will be sold as a fertiliser suitable for organic use that can boost crop yields and aid more sustainable farming. The site is expected to be operational by 2027.

Shares in the FTSE 100 company slumped in early trading after it announced the global cuts plan, which is set to result in a 4 per cent drop in production next year.

Anglo American said it took action earlier in the year to reduce costs “in the face of ongoing economic and geopolitical volatility and the current cyclical weakness in PGMs (platinum group metals) and diamonds”.

The firm has said it will now go further in the face of continued inflationary pressure, as it shares price has dropped by around 30 per cent over the past year.

Mr Wanblad said: “The prospects for mined products have rarely looked better.

“In the near term, given continuing elevated macro volatility, we are being deliberate in reducing our costs and prioritising our capital to drive more profitable production on a sustainable basis.

“We are focused on what we can control – safety, operational discipline and capital allocation.

“We are confident in our actions to sustain the competitiveness of our world-class assets and deliver on our outstanding growth opportunities in the metals and minerals that are so critical now and for generations to come.”

He added: “Anglo American's differentiated investment proposition is underpinned by the high quality and diversification of our portfolio, which includes a number of unmatched resources and industry leading positions.

"Each of our businesses has a dynamic role within the overall portfolio, at different times delivering cash returns and supporting through-the-cycle investment - in copper and crop nutrients in particular - positioning us well to supply into structural long term demand growth."

Last month, Tom McCulley, CEO of Anglo's Crop Nutrients division, told Reuters that reports of the total cost of the Yorkshire mine being $9bn (£7.1bn) were “not too far off”.

Anglo American is seeking partners in the Middle East and Africa for supply and distribution deals having already signed agreements with five companies in locations including the US, Germany and India.

Earlier this year, the company said it was investing £650m in the mine this year after £400m in 2022 and with a further £2.4bn to follow between 2024 and 2026.

The project employs more than 1,600 people at its sites in Whitby, Teesside and Scarborough.