One of Anglo America’s top investors has called for the London-listed miner to mothball its flagship fertiliser mine in North Yorkshire because it won’t provide a good enough return on investment.
The mine, which when complete will tap into the world’s largest known deposit of a yield-boosting chemical called polyhalite, employs an estimated 2,000 people in Yorkshire, some of which are believed to be at risk as a result of the slowdown.
But Dawid Heyl, a portfolio manager at Ninety One, which owns roughly 1.5 per cent of Anglo’s shares worth roughly £500m, has said that the Woodsmith project in the North York Moors would struggle to find buyers.
“They should just leave it and shutter the whole plan,” the investor told The Sunday Times. “I don’t think there is a market for polyphalite of that size. I realise it’s impacting lots of lives and prospects, but… eventually it’s going to run up against a demand issue and the fact that you can’t really sell it at a price that gives you a margin.”
Heyl’s comments come just days after Anglo reported is half-year results, in which it disclosed $1.6bn (£1.2bn) hit on its Woodsmith project.
The project had been put on the back burner in order to “support the deleveraging of its balance sheet” after BHP’s unsuccessful takeover attempt, the firm’s boss, Duncan Wanblad, said alongside the results.
Wanblad had previously claimed Woodsmith was important to the firm’s prospects and, as part of its major restructuring plan, the company has pledged to focus on its core pillars, copper, iron ore and crop nutrients.
And in its results, the firm said it had “high confidence, backed by [our] proven track record in project delivery, to develop the Woodsmith project once the balance sheet is suitably deleveraged and the pathway to syndication is clear”.
Anglo American was approached for comment.