Global mining company Anglo American plans to spend around £446million on the Woodsmith project this year, with shareholders set to receive a bumper dividend totaling £1.5billion.
In a presentation of the results to investors, the FTSE 100 company said it invested £394 million ($530 million) last year in the polyhalite fertilizer mining program which includes its mine near Whitby, North Yorkshire, an underground conveyor belt and shipping facility on Teesside.
It wasn’t until December that the company said it planned to spend around £530m ($700m) on the project.
Read more: go here for more information on North East Affairs
Outgoing chief executive Mark Cutifani said a technical review – started in mid-2020 and following the purchase of the former Sirius Minerals project – was now nearing completion.
It says the Woodsmith project, which currently employs around 1,000 people, would benefit from modifications “to bring it up to Anglo American standards for safety and operational integrity and to optimize long-term asset value”.
He said the changes would result in a longer construction schedule. An updated budget and schedule is expected to be submitted to the Anglo board following the completion of the engineering designs.
Anglo has already dug 18 km of the tunnel which will run from the mine site to the bulk terminal at Redcar. And the intermediate mine access shaft at Lockwood Beck is now complete at 383m depth.
Mr Cutifani said: “The Woodsmith team is further developing the engineering to optimize the project configuration, recognizing the decades-long mine life.
“Particular attention is given to aspects identified early in the Anglo American takeover – namely, the sinking of the two main shafts, the development of the underground mining area and the changes necessary to accommodate both increased production capacity and the most efficient and scalable method of mining using only continuous miners; such improvements will also require the installation of additional ventilation earlier in the development of the underground mining area.
“Prior to the full execution phase of the project, the Woodsmith team, led by new CEO Tom McCulley, is working on detailed design engineering throughout 2022 and is expected to make a number of changes to the phasing of works, especially when it comes to the two main shafts.”
Anglo reported underlying earnings before interest, tax, depreciation and amortization of £15.3 billion ($20.6 billion) on revenue of £30.8 billion ($41.5 billion ).
The company also reduced its net debt from £4.09 billion ($5.5 billion) to £2.8 billion ($3.8 billion).