Anglo American said on Dec. 10 that after conducting a detailed technical review of the Woodsmith polyhalite project in the U.K. to ensure the technical and commercial integrity of the full scope of its design, it has decided that a number of elements of the project’s design would benefit from modification to bring it up to Anglo American’s safety and operating integrity standards and to optimize the value of the asset for the long term.
The Woodsmith team is further developing the engineering to optimize the configuration of the project, recognizing the multi-decade life of the mine. Particular attention is on those aspects identified at the outset of Anglo American’s ownership – namely, the sinking of the two main shafts, the development of the underground mining area, and the changes required to accommodate both increased production capacity and the more efficient and scalable mining method of using only continuous miners. Such improvements will also require the installation of additional ventilation earlier in the development of the underground mining area.
Anglo American expects that these changes to the design of the mine infrastructure, which will result in a different, enhanced configuration, and therefore a different construction and production ramp-up schedule – will ensure that its exacting standards are met and the full commercial value of the asset is realized.
“We are very happy with the high quality and exciting potential of Woodsmith, with the scale and quality of the polyhalite orebody pointing to a Q1 operating cost position and strong margins,” said Mark Cutifani, Anglo American CEO. “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,” he continued. “We expect to have completed our design engineering, capital budget, and schedule at the end of 2022, with a fully optimized value case that recognizes the upside potential we see in Woodsmith, and we will then submit the full project to the Board.”
In the meantime, construction of the major critical path elements of the project, principally the two main shafts and the mineral transport tunnel, is progressing, with approximately $0.7 billion of capital expected to be invested in 2022.