Anglo American PLC (LON:AAL) expects to spend US$500mln on the former Sirius Minerals Yorkshire mine project in 2021, around US$200mln more than it originally expected when it acquired the project at a knockdown price just over a year ago.
The miner’s financial results statement reveals that Anglo spent US$292mln on the Woodsmith mine project in 2020 following its acquisition in March, as the construction of a massive subterranean conveyor beneath the North Yorkshire national park reached the 12 kilometre marker (on the way to the 37 kms that’s required).
At the mine head, Anglo noted that the project’s first shaft boring machine had been commissioned and the company said good progress is being made on the production shaft.
Anglo launched a technical review of the project immediately after the acquisition and the findings are due by mid-2021, though today it highlighted that the report confirms the high quality of the overall project design and development approach.
It added that it is likely to bring forward certain investments to increase early production flexibility.
Previously, under Sirius Minerals, a point of scrutiny was the marketability of POLY4 – the non-standard fertiliser product that the mine will produce in high volumes – and in that regard, Anglo highlighted market development activities including full scale farm trials with over 200 commercial partners globally and a wider commercial demonstration programme.
In the group’s financial results, meanwhile, Anglo reported earnings (underlying EBITDA) of US$9.8bn in 2020, from US$10bn in 2019, and profit attributable to equity shareholders of US$2.1bn, down from US$3.5bn in 2019.
Anglo confirmed a 72 cents per share final dividend, which it noted was consistent with a 40% pay-out policy.
Woodsmith and the Quellaveco copper project in Peru were the focus of the company’s investments in growth.
“Our balanced investment programme is driving material business improvement, while also delivering margin-enhancing and sector leading volume growth of 20-25% over the next three to five years, that includes first copper production from Quellaveco in 2022,” said chief executive Mark Cutifani.
He added: “Looking further out, we benefit from a sequence of high returning growth options, mainly in copper, PGMs, and now also crop nutrients.
“Our business is increasingly positioned to supply those products that are fundamental to enabling a low carbon economy and catering to global consumer demand trends.
“Combined with our integrated approach to technology and sustainability – also helping us reach carbon neutrality across our operations by 2040 – we are well positioned to meet the expectations of our full breadth of stakeholders.”