Anglo American Plc last week reported development of its Woodsmith polyhalite mining and processing project in Yorkshire, northeast England has continued to progress.
Excavation of the conveyor tunnel had passed 15 km at the end of June, beyond the intermediate shaft location at Lockwood Beck, which is located some 32 km from the main mine site.
Last summer, Anglo abandoned plans to construct the intermediate shaft using drill and blast techniques and announced plans to use “blind boring” techniques instead. The Lockwood shaft will just be used for ventilation allowing it to use the simpler shaft sinking method.
The company last week said the shaft sinking at Lockwood Beck is now complete, having reached the target depth of 383 metres, and shaft lining is under way.
At the mine head, shaft boring has started in the services shaft, while good progress is also being made on the production shaft infrastructure.
Anglo American said the detailed technical review of the project’s development plan is now completed (GM March 5, p. 1), with the objectives of optimizing the project and aligning it with the company’s technical and other standards.
The company is targeting the completion of the review and subsequent finalization of project design and timing for the end of this year, including final capital and schedule estimates. As previously indicated by the company, it re-iterated last week the investment in additional ventilation to increase early production flexibility is likely to be brought forward. Anglo said it is also working through the detailed scheduling of the two shaft installations.
Anglo American CEO Mark Cutifani admitted to analysts at a company first-half earnings call on July 29 that the company does see “some challenges” in the timing of the project’s two shafts. But he emphasized this was not unexpected as the shafts were picked up as “an issue” when the company did its due diligence for the acquisition of Woodsmith’s owner, Sirius Minerals Plc, completed in March 2020 in a US$0.5 billion deal (GM March 20, 2020).
Cutifani said the first shaft boring roadheader (SBR) will start operations during August, adding that will help inform the company what the shafts will look like, “which will then inform our investments going forward.”
He emphasized Anglo will program out the shafts to make sure that the company manages the costs “in a very tight envelope.”
“Even if we take an envelope of good and bad, it is still an overwhelmingly positive, strong project,” said the CEO. “We bought Sirius to build and take forward [the polyhalite] project, and that has not changed from anything we have seen.”
According to the CEO, Anglo plans to provide by February 2022 the full plan and projected timing of the Woodsmith project.
An analyst at the earnings call drew parallels with “another big mining company in Canada,” questioning whether “this [Woodsmith] movie might also not play well,” given that the project is not formally Board approved, and Anglo is spending “quite significantly” on preparatory works with a final investment decision to be taken later. Responding, Cutifani said he believes Anglo will be going forward with the project, and the only debate will be the date of acceleration.
Cutifani reported the company is now in “full commercial trials” of the polyhalite products from Woodsmith, with about 550 commercial trials in progress or complete.
“This is about building up the customer base for long-term use of the product,” he said, reiterating about the nature of the product. “It is not potash; it is a multi-nutrient, low chloride fertilizer certified for organic use.”
Anglo is targeting the production of up to 10 million mt/y of Poly4, the marketed form of polyhalite. Anglo’s capital expenditure on Woodsmith, which is part of the company’s Crop Nutrients business division, was US$279 million in the first half of 2021, and the expected capex for the full year is unchanged at around US$0.5 billion.