By ashleykaren
Anglo American, the British mining company, has made further progress on building the Woodsmith polyhalite project in North Yorkshire, after revising its approach and design.
As part of a contemporary investor update, Anglo American gave an update on the physical progress made on its Woodsmith fertilizer mine project.
It has arrived at a depth of 265m on its 1.6km service shaft and 230m on the 321m deep mineral transport shaft.
Moreover, a TBM excavated 20km of the 37km mineral transport tunnel that will connect the mine to the port at Teesside.
Shaft sinking on the 1.6km production shaft, in turn, is anticipated to start in the first quarter of 2023.
Duncan Wanbland, Anglo American CEO stated that the project was “making great progress”, which he put down to the reconfiguration that Anglo American Crop Nutrients CEO Tom McCulley has put in place.
McCulley was appointed to the position in January this year. His focus was on presenting changes to the phasing of the works, the mine infrastructure and the mining method.
Wanbland pointed out: “This year, he has already re-prioritized the project, with a core focus … around the critical path items. And this means that we have pushed out by design now a few areas that don’t quite yet need to be developed, so things like the port, the materials handling facilities and so on; they’ll come at a later stage. And he’s restructured certain aspects of the contracts that we had around this project to much more align with the priorities as we see them in terms of development.”
He continued: “So, the team is now busy bringing all of the stuff in line with our own development standards and progressing pretty well. At Woodsmith, we are going to develop a truly low impact mine. It is one that is going to set a new standard in terms of what the future of mining looks like form a production point of view.”
Anglo American’s costs on the project will amount to almost US$500M (£408M) for this year, while it is planning to spend about US$800M (£653M) in 2023 to continue the shaft sinking, tunnelling and work on other essential infrastructure.
“We should not ignore the fact here that Woodsmith is a completely different capital project to other options we have in the suite. Two shafts, a mile deep each, are very different form an open pit and requires a phased approach to its development and therefore a phased approach to its capital approvals,” Wanbland added.
He mentioned: “The major items of kit here are thankfully already in place. So, it’s not like we have to go and procure tunnel borers and shaft sinking machines; they’re already there, they’re already configured and they’re already in place and operating.”
Stephen Pearce, Anglo American CFO indicated: “We’ve always said that we’ll design and execute Woodsmith with an Anglo American lens, and that it was likely to cost more, take longer and that we had a very positive but conservative view of the market price, but we expect upside to that market price as we learn more about the market and that market itself develops. So, we’re doing all of that so that we can maximize the long-term value of this long-life asset, and none of that has changed.
Pearce continued: “As Tom and the Woodsmith team continue to progress all the workstreams, including our view of what is currently a very, very strong fertilizer market, we will feed those assumptions into our models for year-end accounting purposes and asses current value.”
Anglo American received the project as part of a takeover of Sirius Minerals at the beginning of 2020.
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