Anglo American (LON:AAL) flagged on Friday major design changes to the vast fertilizer project being built beneath the North Yorks Moors national park in England, which it acquired last year when buying British junior Sirius Minerals.
The company, which has so far excavated about two-thirds of a 37-km-long tunnel between the Woodsmith mine and a port on Teesside, said it will inject a further £530 million ($700m) into the project.
The additional investment will be used to continue the sinking of two main shafts and the development of underground areas to accommodate increased production capacity, it said.
Anglo added the planned changes, a result of a detailed technical review, would result in a “different construction and production ramp-up schedule.”
“We expect to have completed our design engineering, capital budget and schedule at the end of 2022,” chief executive Mark Cutifani, who is being replaced in April by Duncan Wanblad, said in the statement.
“We will then submit the full project to the board.”
The diversified miner is also modifying the leadership at Woodsmith ahead of the full project execution phase. Tom McCulley, who has led the development of the Quellaveco copper project in Peru, will take over from Chris Fraser as the chief executive of the company’s new Crop Nutrients division.
Fraser, who led the project for 12 years, will take on a new “strategic projects role” at Anglo.
Woodsmith’s previous owner estimated the project required about $3.3 billion for completion, with first production slated for 2024.
The project, England’s largest new operation in decades, could also become one of the world’s largest in terms of the amount of resources extracted. Woodsmith will generate an initial 10 million tonnes per year of polyhalite, a multi-nutrient fertilizer, containing four of the six key elements needed for plant growth — potassium, sulphur, magnesium and calcium.
The project involves sinking two 1.5km-deep mine shafts to tap the deposit of polyhalite located underneath the North York Moors National Park, and building a tunnel to take the material to the closest export terminal.
RBC Capital Markets analyst Tyler Broda said the fact that Anglo is aiming for a larger than planned operation reaffirms the bank’s view that the miner is confident about the end market for polyhalite.
“This, however, will place an asterisk over potential capex levels in the 2023-26 time frame. Kicked to touch once again, we won’t know full details until the end of 2022,” Broda wrote.
Woodsmith was originally expected to create about 1,800 jobs during construction and 1,000 permanent positions once opened, but Anglo’s changes are likely to increase such figures.