Anglo American seeks partners for fertiliser project amid company restructuring
Anglo American's CEO, Duncan Wanblad, revealed the company's search for partners in its North Yorkshire fertiliser project, emphasising its importance despite delays. The miner plans to divest unprofitable ventures like coal and nickel to counter BHP Group's takeover bid. The Woodsmith fertiliser project's development is slowed, awaiting partners. Despite challenges, Wanblad remains optimistic about the project's future, aiming for progress once the restructuring is complete.
Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.
By Clara Denina and Felix Njini
Anglo American has been looking for partners for its fertiliser project in North Yorkshire for around six months, Chief Executive Duncan Wanblad told Reuters, reiterating the business will be one of three pillars of the revamped miner, even as work there stalls.
The London-listed miner outlined a radical plan on Tuesday to shrink by divesting less profitable coal, nickel, diamond and platinum businesses, as it moves to fend off BHP Group's $43 billion takeover offer.
As part of the plan, Anglo said it would slow the development of its Woodsmith fertiliser project in northeast England, pushing back first production from 2027.
"We have been in the market looking for partners for the better part of six months now and we have to stall to get the partners to the point where they are prepared to invest," Wanblad said in an interview with Reuters on Thursday.
Woodsmith, on which the miner announced a $1.7 billion writedown a year ago, has the world's largest known deposit of polyhalite, a naturally-occurring mineral containing nutrients including potassium, calcium, magnesium and sulphur, which it is marketing as POLY4.
A feasibility study for the project is only expected to be ready by the beginning of 2025. This would have been followed by a board full notice to proceed in the first half of the year if the wider assets restructuring had not got in the way.
"(When) we're delevered materially compared to where we are now, we're going to be in a much stronger position to move this forward and that's the plan," Wanblad said.
The company's net debt swelled to $10.6 billion by the end of 2023, from $6.9 billion a year earlier.
Analysts estimated total spending on Woodsmith at around $9 billion.
Wanblad also said a plan to spin off the company's platinum unit in South Africa, sell off or demerge the diamonds and coking coal businesses wasn't rushed by the takeover threat from BHP.
Anglo last week rejected a second proposal from the world's No. 1 miner.
"I started an operational restructure last year …in May, it was completed in December," Wanblad told Reuters.
In February, Anglo announced an asset review having earlier outlined plans to implement deeper cost cuts to preserve cash.
"None of this is a response that we've caught up or concocted up in the last 10 days," Wanblad added.
"You can see the clarity of the thinking and the depth of the thinking that's gone into this, it's not days' worth of work, it's many months' worth of work."
Read also:
SOURCE: REUTERS
(Reporting by Clara Denina and Felix Njini; Editing by Susan Fenton)