Woodsmith Project: Job fears for 2,000 employed on massive Yorkshire mine as scheme delayed

Mining giant Anglo American, which is currently fighting a takeover bid from rival firm BHP, made a shock announcement yesterday morning that it will “slow the development” of a scheme dubbed the Woodsmith Project to cut costs.

The scheme involves the creation of a new mining site near Sneaton south of Whitby and a 23 mile tunnel that will transport a naturally occurring mineral, polyhalite, to new processing and shipping facilities on Teesside. It is intended the product will be sold globally as a fertiliser suitable for organic use that can boost crop yields and aid more sustainable farming.

Construction started back in 2017 and was taken over by Anglo American in 2020 from previous owners Sirius Minerals. It now employs around 2,000 people, with a stated aim of reaching polyhalite by 2027. It was planned around 1,000 highly-skilled permanent jobs would be created, along with hundreds more in the local supply chain.

But in an announcement on Tuesday morning, the company said: “In the near term, Anglo American will slow the development of the Woodsmith project to support Anglo American's balance sheet deleveraging.”

No new timescale has been announced but it is understood the scheme could be delayed by two years as a consequence.

Anglo American has already invested £2bn in the project, with nearly 18 miles of the 23-mile tunnel already built.

The company has previously said capital expenditure on the project was expected to be around £800m a year between 2024 and 2026. But the new announcement states $200m (£159m) will be spent in 2025 and nothing in 2026 – an effective cut of more than £1.4bn.

The planned £800m investment for this year is understood to still be going ahead.

Tom McCulley, CEO of Anglo American’s Crop Nutrients business, said: “Anglo American has again stated that Woodsmith is central to its growth plans.

“We have been progressing the project on time and on budget but have decided to slow development in the near term.

“Anglo American continues to recognise Woodsmith’s unique resource and long-term value potential and will complete critical technical studies in 2025 to then enable syndication for value with one or more strategic partners.

“We need to work out the full details of this in the coming weeks and ensure that we are able to re-start full construction activity as soon as conditions allow.

“I know that this announcement will create uncertainty, but we will keep our workforce and community stakeholders updated as we work through the detail of what this means for everyone.”

Scarborough and Whitby MP Sir Robert Goodwill told The Yorkshire Post that the announcement has come as a shock.

"If you pause a project like this it is hard to get it moving again,” he said. “I hope they might think again.

“It is worrying for all concerned. This came completely out of the blue.”

He said he was surprised by the announcement given how much has been invested so far and the amount of construction work done to date.

Sir Robert said it was “unlikely” the Government would get involved in the project and he hoped either BHP press ahead with the scheme if a takeover happens or another mining company steps in to help bring it forward.

Middlesbrough South and East Cleveland MP Sir Simon Clarke wrote on X, formerly Twitter, that he was “very concerned” by the announcement and would be seeking a meeting with Anglo American.

He said the news “will clearly have significant implications for the dedicated workforce, who are my number one priority here”.

Henri Murison, chief executive of Northern Powerhouse Partnership, said: “The Woodsmith Mine is a critical project for the North of England, with huge potential for UK exports and global food security.

“Our primary concern is maintaining employment for the Anglo American colleagues on site and in Scarborough, as well as the local supply chain. Syndication with one or more strategic partners in the coming period would secure a viable future to complete the project.”

The stock market announcement stated that Woodsmith remains “integral” to Anglo American’s growth plans despite the cut in investment, with a feasibility study to be finished in the first half of next year.

It is hoped the completion of the feasibility study will help secure outside investment to allow the project to progress.

Anglo American said the scheme has “outstanding long term potential” and can play an important role given “threats to food security and the increasing challenges around access to arable land and the need to increase crop yield and support improved soil health”.

The proposals for the site are part of much wider "radical changes” announced by Anglo American, including proposals to divest or demerge its De Beers diamond company business and sell its steelmaking coal arm.

The announcement came a day after Anglo American rejected a second revised buyout offer from BHP, which valued its rival at £34 billion.