Anglo American writes off £1.4bn on Yorkshire potash mine

Anglo American has written off £1.4bn of the value of its massive fertilizer mine in North Yorkshire amid rising costs and delays.

The FTSE 100 mining giant saved the Woodsmith mine near Whitby from collapse three years ago after former owner Sirius Minerals failed to secure crucial financing.

Anglo paid £405 million for the project, which is located in the North York Moors National Park. But Woodsmith turned out to be much worse off than Anglo first thought.

The company has since been saddled with skyrocketing costs – a further £1.1bn spent so far – and has had to go back to the drawing board to review the full construction plan and timeline.

Anglo now estimates it will cost a total of £5 billion to open in 2027. The Sirius team initially said the mine could produce polyhalite – a form of potash – by 2021.

According to Anglo’s plans, it could stay open for 50 years.

The project is incredibly complicated as it requires two shafts – both a mile deep – to be built at the main site.

It is also building a tunnel longer than the Channel Tunnel to take stone from the mine to a processing plant in Teesside.

Sirius was a stock market darling for many years as it garnered a following of thousands of private shareholders, many of them from Yorkshire.

At one point there were 85,000 individual investors.

But when the company failed to secure financing in 2019 and its share price collapsed, some lenders lost large chunks of their savings and pensions.

Jefferies analyst Christopher LaFemina said the write-down was “useless.” A final investment decision for Woodsmith is still two or three years away.

Anglo released the Woodsmith update alongside its annual financial results which showed profits fell 30 per cent to £12bn due to falling commodity prices and rising costs.