By Clara Denina and Muhammed Husain
LONDON (Reuters) – Anglo American Plc said on Thursday it would incur an impairment of $1.7 billion on its project to produce fertiliser nutrients in Britain, as it seeks to accommodate higher production volumes and improve mining efficiency.
The group said it expects the first product from the Woodsmith project in north-east England, which has the world’s largest known deposit of polyhalite, a multi-nutrient fertiliser, entering the market in 2027, with an annual capital investment of around $1 billion.
The London-listed miner bought the Woodsmith project in Britain’s North York Moors National Park for 405 million pounds ($488.35 million) in 2020 and said it has spent $1.35 billion so far expanding it.
It now expects first production from 2027, reaching around 5 million tonnes per annum by 2030, from a previous estimate of 2024 with output of 10 million tonnes a year in the initial phase.
“And then depending on how we shape and develop the markets from there, we will expand it from the 5 million tonnes to the 13 million tonnes,” Chief Executive Duncan Wanblad told reporters.
“We have taken a writedown on it now because the timeline and budget have been extended… but absolutely be in no doubt that we are setting Woodsmith up to generate significant cashflows for many, many decades, we’ll be building it out now until 2027,” Wanblad added.
The global miner, which also produces copper, iron ore, precious metals and diamonds, joined most of its rivals in reporting lower full-year earnings and shareholder dividend, hit by a fall in commodity prices and higher mining costs.
It declared a full-year dividend of $1.98 per share, down from $4.99 per share in 2021 and a 30% fall in underlying core profit for 2022 to $14.5 billion due to higher costs, lower prices and production, slightly above an average forecast of $14.35 billion from 14 analysts compiled by research firm Vuma.
($1 = 0.8293 pounds)
(Reporting by Clara Denina; Editing by Vinay Dwivedi and Emelia Sithole-Matarise)
