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Mining giant Anglo American has announced a series of leadership and developmental changes to the former Sirius Minerals project in North East England.
The firm said it has nearly completed a review into the Woodsmith polyhalite project, which is being overseen by its Crop Nutrients business and has identified specific measures that are needed to enhance the site’s safety and economic value.
These include the sinking of two mine shafts, and the development of the underground mining area to make room for expanded production capacity and the use of continuous miner machines.
Gigantic project: The Woodsmith Mine has the largest known deposit of polyhalite in the world and could potentially provide £100billion of economic benefit to the UK over a 50-year period
It plans to invest around $700million next year on the project, which was formerly run by Sirius until Anglo American bought the cash-strapped company in a £405million deal in March 2020.
The FTSE 100 multinational also revealed today that Tom Culley, the head of its Peruvian division, will oversee the project as he is to replace Chris Fraser as the chief executive of Crop Nutrients from the start of January.
Polyhalite is a mineral containing multiple nutrients such as potassium, calcium and sulphate that is not just highly valued for its ability to fertilise crops but for being a naturally-occurring product with a low-carbon footprint.
Yorkshire-based Woodsmith has the largest known deposit of polyhalite in the world and could potentially provide £100billion of economic benefit to the UK over a 50-year period.
Outgoing Anglo American chief executive Mark Cutifani said: ‘This is a very long-life asset, and we are going to take the necessary time to get every aspect of the design right to match our long term vision and value aspirations.
‘We have said from the outset that we expect to make improvements and that we will execute certain elements of the construction differently and with a more conservative schedule.
Mining giant: FTSE 100 multinational Anglo American is the globe’s largest platinum producer and owns the well-known De Beers diamonds company
‘We expect to have completed our design engineering, capital budget and schedule at the end of 2022, with a fully optimised value case that recognises the upside potential we see in Woodsmith, and we will then submit the full project to the Board.’
Alongside the announcement about Woodsmith, Anglo American confirmed its guidance for 2021 following a solid performance by the group.
Production is to rise by 7 per cent and unit costs are to increase by 10 per cent this year, while capital expenditure will decline $5.2billion on the back of issues with its supply chain and delays caused by the coronavirus.
Next year, meanwhile, it estimates unit costs to grow by 4 per cent and capital spending of between $6.2billion and $6.7billion, partly as a result of spending related to deferrals and the Woodsmith project.
Beyond that, the FTSE 100 miner, which is the globe’s largest platinum producer and owns the well-known De Beers diamonds company, said it expected to deliver 35 per cent growth over the next decade at margins of 50 per cent.
It forecast a stronger performance in 2022, while planning to harness early copper production from Quellaveco, a $5billion project in one of the world’s largest untapped copper resources.
The project in world’s second copper producer is due to start up amid change in Peru, where a new leftist administration led by President Pedro Castillo has pledged to overhaul the mining industry and redistribute mineral wealth.
Shares in Anglo American closed trading 1.9 per cent lower at £29.16 on Friday, but their value is still up by about 14 per cent since the beginning of the year.
