Yahoo News Concern over Woodsmith mine as owners Anglo American 'slow' project
Mining giant Anglo American is to slow work on a mining project that aimed to bring hundreds of jobs to North Yorkshire and Teesside.
Anglo American - which is battling a £34bn takeover approach from rivals BHP Billiton - took on the Woodsmith project near Whitby in 2020. It aims to take natural mineral fertiliser from underneath the North York Moors National Park before transporting it via an underground conveyor system to Redcar where it will be exported to global markets.
But in a statement to the Stock Exchange in which it outlined plans to simplify its operations to concentrate on copper and iron ore production, the company said it would “slow” work on the massive development this year and cut capital investment in the site in 2026. The company said the mine had “long term potential” but that it would be carrying out studies next year to determine its future.
It has also been reported that Australian firm BHP Billiton would not proceed with Woodsmith if its takeover was successful.
Anglo American has come under pressure to show it can deliver value for investors in the face of the takeover interest. Anglo American told shareholders that it plans to sell or demerge its De Beers diamond business, Anglo American platinum and coking coal assets.
The company also said it will continue efforts to cut costs and reduce its debt leverage on its balance sheet. Having initially said it would spend around $1bn (£800m) each year at Woodsmith, the firm said it will cut this to $200m (£159 m) in 2025 and no capital expenditure in 2026 to help the group’s finances, though there will be operational expenditure.
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. We need to work out the full details of this slow down over the coming weeks as we reduce activity while retaining optionality for the long term.
“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.”
Concerns have been expressed by Middlesbrough South and East Cleveland MP Sir Simon Clarke, who said: “I know a number of constituents will be very concerned by the bad news coming out of Anglo American this morning - so am I. They have set out their intention to slow down the pace of their Woodsmith Mine development dramatically. This clearly will have significant implications for the dedicated workforce, who are my number one priority here.
“I met the company last week to discuss the potential BHP Billiton takeover bid: the market suggestion has been that if BHP were to buy Anglo out, they would not proceed with the Woodsmith Mine owing to their running a rival project in Canada. There was however no hint on my call with Anglo of any intention on their part to change their own plans for Woodsmith and today’s news therefore comes as a very unwelcome surprise.
“I appreciate any such decision is inherently market sensitive and hence can only be released to the stock market first, but this is a major blow. I will seek a fresh meeting with Anglo as soon as possible and will update my constituents with all further information I am given.”
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