Woodsmith Project: Anglo American to 'slow development' £7bn Whitby fertiliser mine scheme with opening delayed

The opening of a multi-billion pound fertiliser mine in North Yorkshire is due to be delayed by at least two years as the company behind it announced it intends to “slow the development” of the scheme and make substantial cuts to upcoming investment in the project.

The company, which is currently fighting a takeover bid from rival corporation BHP, has announced major changes to the Woodsmith Project as part of efforts to persuade shareholders of the firm’s future strategy.

The 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. It is intended the product will be sold as a fertiliser suitable for organic use that can boost crop yields and aid more sustainable farming.

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Construction started back in 2017 and was taken over by Anglo American in 2020 from previous owners Sirius Minerals. It now employs around 2,000 people, with a stated aim of reaching polyhalite by 2027.

Anglo American is to 'slow the development' of a major new mine in YorkshireAnglo American is to 'slow the development' of a major new mine in Yorkshire
Anglo American is to 'slow the development' of a major new mine in Yorkshire

But in an announcement to the London Stock Exchange on Tuesday morning, the company said: “In the near term, Anglo American will slow the development of the Woodsmith project to support Anglo American's balance sheet deleveraging.”

No new timescale has been announced but it is understood the scheme could be delayed by two years as a consequence.

Anglo American has already invested £2bn in the project, with nearly 18 miles of the 23-mile tunnel already built.

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The company has previously said capital expenditure on the project was expected to be around £800m a year between 2024 and 2026. But the new announcement states $200m (£159m) will be spent in 2025 and nothing in 2026. The planned £800m investment for this year is understood to still be going ahead.

Tom McCulley, CEO of Anglo American’s Crop Nutrients business, said: “Anglo American has again stated today that Woodsmith is central to its growth plans as a Tier 1 resource – entirely aligned with the demand trends of decarbonisation and food security.

“We have been progressing the project on time and on budget but have decided to slow development in the near term. I’m incredibly proud of the progress we have made so far, the positive impact on the local area and the partnerships we have built in our local communities, which we will continue to engage positively with.

“Anglo American continues to recognise Woodsmith’s unique resource and long-term value potential and will complete critical technical studies in 2025 to then enable syndication for value with one or more strategic partners.

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“We need to work out the full details of this in the coming weeks and ensure that we are able to re-start full construction activity as soon as conditions allow.

“A key aspect of this will be to continue adhering to our planning obligations with the North York Moors National Park Authority and Redcar and Cleveland Borough Council.

“I know that this announcement will create uncertainty, but we will keep our workforce and community stakeholders updated as we work through the detail of what this means for everyone.”

Scarborough and Whitby MP Sir Robert Goodwill told The Yorkshire Post that the announcement has come as a shock and he was concerned about the future of the project and the potential impact on jobs and the local economy.

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"If you pause a project like this it is hard to get it moving again,” he said. “I hope they might think again.

“It is worrying for all concerned. This came completely out of the blue.”

He said he was surprised by the announcement given how much has been invested so far and the amount of construction work done to date.

Sir Robert said it was “unlikely” the Government would get involved in the project and he hoped either BHP press ahead with the scheme if a takeover happens or another mining company steps in to help bring it forward.

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Middlesbrough South and East Cleveland MP Sir Simon Clarke wrote on X, formerly Twitter, that he was “very concerned” by the announcement and would be seeking a meeting with Anglo American.

He said the news “will clearly have significant implications for the dedicated workforce, who are my number one priority here”.

Henri Murison, Chief Executive of Northern Powerhouse Partnership, said: “The Woodsmith Mine is a critical project for the North of England, with huge potential for UK exports and global food security.

“Our primary concern is maintaining employment for the Anglo American colleagues on site and in Scarborough, as well as the local supply chain. Syndication with one or more strategic partners in the coming period would secure a viable future to complete the project.”

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The stock market announcement stated that Woodsmith remains “integral” to Anglo American’s growth plans despite the cut in investment.

The company said: “Anglo American will continue to work towards the completion of the feasibility study in the first half of 2025, as an essential building block for syndication to a strategic partner.”

It is hoped the completion of the feasibility study will help secure outside investment to allow the project to progress.

Anglo American said the scheme has “outstanding long term potential” and can play an important role given “threats to food security and the increasing challenges around access to arable land and the need to increase crop yield and support improved soil health”.

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The statement said: “Anglo American has high confidence, backed by its proven track record in project delivery, to develop the Woodsmith project, which is currently on plan and on budget.

"Anglo American continues to recognise the asset's unique resource and long term value potential and will complete critical technical studies in 2025 to then enable syndication for value with one or more strategic partners.”

Last year, 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”.

The proposals for the site are part of much wider changes announced by Anglo American, including proposals to divest or demerge its De Beers diamond company business and sell its steelmaking coal arm.

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Duncan Wanblad, Chief Executive of Anglo American, said: "We set out our clear strategic priorities earlier this year - operational excellence, portfolio simplification, and growth. Our decision to focus Anglo American's portfolio in our world-class resource asset base in copper and premium iron ore - while retaining our crop nutrients optionality at Woodsmith - marks a major new phase in executing our strategy.

"We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction.

"These actions represent the most radical changes to Anglo American in decades.”

The announcement comes a day after Anglo American rejected a second revised buyout offer from BHP, which valued its rival at £34 billion.

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In a stock market update, BHP said it was “disappointed” that South Africa-based company Anglo American had rebuffed the offer, in what would have been the biggest deal in the mining sector for a decade.

In late April, Anglo American declined a similar offer which valued it at about £31 billion, saying the board had unanimously agreed that it significantly undervalued the company.

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