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Sirius Minerals owner Anglo American keeps Woodsmith mine work going

“Strict social distancing measures are allowing essential work to progress” at the Yorkshire mining project

Anglo American PLC -
Construction of a huge tunnel forms a large part of the huge cost of developing the Woodsmith mine

Anglo American PLC (LON:AAL) said it was keeping operations going as planned at Sirius Minerals’s Woodsmith polyhalite project after completing the takeover of the UK mine developer last month.

This was despite the FTSE 100 group saying the Covid-19 pandemic was forcing it to reprioritise its capital expenditure between various projects.

Production guidance was cut and spending plans were slashed by US$1bn for the year as the mining giant has been forced to put coronavirus social distancing measures in place at its many projects around the world. 

At the Woodsmith in North Yorkshire, Anglo said “strict social distancing measures are allowing essential work to progress”.

Planned capital investment of around £0.3bn in 2020 at the former Sirius project is still expected to be maintained thanks to these social distancing measures.

Across its mines in South Africa, Brazil, Chile and other countries, the group said it was operating with around 50% of the normal workforce due to measures put in place because of the coronavirus outbreak.

Anglo completed the £460mln takeover of Sirius in March after the Scarborough-headquartered developer, which had targeted first polyhalite production for the final quarter of 2021, was forced to pull its US$3bn project financing plans after failing to land debt financing on viable terms.

Lenders were demanding a high premium for the risks attached to an ambitious development being run by a company with no prior track record of building mines, which is also building a 36,700-metre tunnel to transport polyhalite to Teesside that when completed in 2021 will be the longest operational tunnel in the UK (but far from the longest in Europe or the world).

The FTSE 100 group’s 5.5p per share offer was recommended by the Sirius board but was attacked by the outfit’s legion of smaller investors, many of which were Yorkshire locals that had poured their savings into the company, plus some vocal City supporters.

Quick facts: Anglo American PLC

Price: 2369.5 GBX

Market: LSE
Market Cap: £32.25 billion

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