Tag Archives: POLY4

Anglo American increases Woodsmith polyhalite scale as shaft sinking progresses

Energy minerals, Mine shafts and equipment, Mineral project development, Mining services, , , , , , , , , , , , ,

Anglo American is upping the ante at its Woodsmith polyhalite project in the UK, increasing its planned spend while expanding its production scope following detailed design reviews and non-critical path studies.

In the company’s 2022 results release today, it said these reviews and studies had led to a number of areas being modified to align with Anglo American’s standards and its aim to optimise value for the long term.

The outcome is an enhanced project configuration to ensure the company delivers maximum commercial returns from Woodsmith over the expected multi-decade asset life, Anglo said. Included within this is an increase in the capacity of the shafts and other infrastructure to accommodate higher production volumes and more efficient and scalable mining methods over time.

More specifically, this has seen the company plan for a circa-13 Mt/y operation instead of the previous 10 Mt/y operation it had endorsed, subject to studies and approval.

“In light of these changes, Anglo now expects first product to market in 2027, with an annual capital investment of around $1 billion,” the company said.

Spending of $800 million is approved for 2023, with the bulk of initial spend on the shaft sinking and tunnel boring activities. As usual in developing underground mines, the schedule will largely be determined by the ground conditions encountered as sinking activities progress.

The Woodsmith project is located on the North Yorkshire coast, just south of Whitby, where polyhalite ore will be extracted via 1.6-km-deep mine shafts and transported to Teesside via an underground conveyor belt in a 37 km tunnel, thereby minimising any environmental impact on the surface. It will then be granulated at a materials handling facility to produce a low carbon fertiliser – known as POLY4 – that will then be exported from its port facility, where it has priority access, to a network of customers around the world.

During 2022, as part of the mentioned construction review, contracts were awarded for the shaft sinking operations, program management services and construction management to ensure the project can be executed in line with Anglo American’s stringent requirements. These contracts were awarded to Redpath (shaft sinking) and Worley (program management services and construction management).

With the award of these contracts and other infrastructure improvements, activities at the deep shafts have progressed. The service shaft is now more than 360 m deep, while shaft sinking began 120 m below the surface for the production shaft in January 2023, as planned. Both of these shafts are being sunk using Herrenknecht’s Shaft Boring Roadheader technology.

Three intermediate shafts will provide both ventilation and additional access to the mineral transport system (MTS) tunnel. The Lockwood Beck intermediate access shaft was successfully completed in 2022 and is fully lined and connected to the tunnel. Work on the MTS shaft at the mine head progressed through 2022 and is 85% complete, and the excavation at the final intermediate access shaft at the Ladycross site commenced in early 2023.

Following a planned maintenance pause in mid-2022 to refurbish the tunnel boring machine and allow the connection with the Lockwood Beck shaft, the MTS tunnel is now past the 21-km point and is more than 56% complete, progressing at rates not seen since the start of the tunnelling activities, Anglo said.

Anglo American concluded: “We believe that the changes we have made to the project have had a materially positive impact on the project’s long-term attractiveness and prospects. However, for accounting purposes at this early stage of the project’s development, we have recognised an impairment of $1.7 billion to the carrying value of the asset within special items and remeasurements, reflecting the extension of the development schedule and capital budget.”

Anglo American continues SBR-led shaft sinking progress at Woodsmith

Energy minerals, Mine shafts and equipment, Mineral project development, Mining equipment, Mining services, , , , , , , , , , , ,

While Anglo American continues with its detailed technical review of the Woodsmith polyhalite project in the UK, shaft sinking activities at the asset continue to progress, the company confirmed in an investor update today.

The project was acquired by Anglo American in 2020 with the purchase of Sirius Minerals. Since then, Anglo American has been working on refining the development pathway and overall production potential of the asset.

In an investor presentation today, the company outlined physical progress on the site, explaining that shaft sinking for the circa-1.6-km deep service shaft had progressed to the circa-265-m level. It also said the mineral transport shaft, which it is working on with Redpath Group as sinking contractor, had reached the circa-230-m level of a planned 321-m depth.

Regarding horizontal development, it added that the 37-km mineral transport tunnel – which will connect to the mineral transport shaft – had reached the 20-km development mark with tunnel boring machine technology.

The Woodsmith project overview includes the sinking of production and service shafts with 6.75-m diameters – having depths of 1,594 m and 1,565 m, respectively – and the 37-km-long concrete-lined tunnel containing a conveyor belt, which transports the polyhalite ore from Woodsmith mine, near Whitby, to the Mineral Handling Facility, on Teesside, for processing and shipping.

Both the service shaft and production shaft at Woodsmith are being sunk using Herrenknecht’s Shaft Boring Roadheader technology, which has previously featured on the Jansen potash project in Saskatchewan, Canada, where it excavated two 8-11 m diameter blind shafts down to circa-1,000-m-depth and the Slavkaliy-owned Nezhinsky potash project, where it ended up breaking shaft sinking records under the guidance of contractor Redpath Deilmann on a project to sink two 8-m diameter shafts (one to 750-m depth and one to 697-m depth).

The first cut for the service shaft was made in July 2021, with Anglo American and Redpath Deilmann – which is now leading the sinking project as shaft sinking contractor – restarting sinking activities on this shaft earlier this year.

In the same investor presentation issued today, Anglo American said it planned to start sinking in the production shaft in the March quarter of 2023.

While the ongoing review takes place, Anglo American confirmed it had approved $800 million of capital expenditure for Woodsmith next year, focused on shaft sinking and other critical infrastructure as part of its phased approach to the asset.

Stephen Pearce, Finance Director of Anglo American, said on Woodsmith: “As we have said for some time, we are improving the project’s configuration to ensure we realise the full commercial value over the expected multi-decade asset life. This will extend the development schedule and the capital budget, compared to what was anticipated prior to our ownership, and so potentially impact our carrying value of Woodsmith for accounting purposes at the year end.

“Looking ahead, we are even more positive today about the prospects for Woodsmith and its potential to become a high margin, major contributor to our diversified product portfolio given the outstanding nature of the resource and the premium pricing upside we expect to realise for Poly4 – the highly effective, low carbon fertiliser we will produce.”

Anglo American eyes polyhalite potential with Sirius Minerals bid

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Anglo American has gone public with a bid to buy Sirius Minerals and its North Yorkshire polyhalite project in the UK.

The all-cash bid, which values Sirius at £386 million ($507 million), comes shortly after Sirius announced a strategic review for the project that included a broader process to seek a major strategic partner for the asset.

Anglo says it identified the project as being of potential interest some time ago, given the quality of the underlying asset in terms of scale, resource life, operating cost profile and the nature and quality of its product.

The North Yorkshire polyhalite project, which is spilit into two stages, will see product extracted via two mine shafts and transported to Teesside, in the northeast of England, on a conveyer belt system in an underground tunnel. It will then be granulated at a materials handling facility (MHF), with the majority being exported to overseas markets.

Infrastructure development on the project includes sinking the shafts at the Woodsmith mine to access the polyhalite deposit (using Herrenknecht’s Shaft Boring Roadheader); developing a 37 km-long underground mineral transport system using tunnel boring machines; constructing a MHF in Teesside for granulating or chipping the mined material into the final product; and harbour facilities comprising an approximately 3.5 km-long overland conveyor, a ship berth and a ship loader located adjacent to the harbour on the River Tees.

In its announcement this morning, Anglo said: “The project has the potential to fit well with Anglo American’s established strategy of focusing on world-class assets, particularly in the context of Anglo American’s portfolio trajectory towards later cycle products that support a fast-growing global population and a cleaner, greener, more sustainable world.”

Anglo is not new to the fertiliser market having, until 2016, a phosphates business in Brazil. It sold the mine, beneficiation plant, two chemical complexes and two further mineral deposits that made up this business that year to China Molybdenum in a $1.5 billion deal that also included its niobium assets.

Sirius announced its strategic review back in September 2019 after it had to terminate a $2.5 billion revolving credit facility stage 2 financing for the project (to get it to 20 Mt/y capacity) due to a worsening of market conditions for a required bond raising.

This led to the company slowing development across the project in order to preserve funding to allow more time to “develop alternatives and preserve the significant amount of inherent value in this world-class project”, Chris Fraser, Managing Director and CEO, said at the time.

This saw the company lay out a pathway that would still see first polyhalite production in the June quarter of 2022, but could see the ramp-up to stage one 10 Mt/y polyhalite capacity reached in the September quarters of 2025 or 2026, depending on if there was a 12 or 24 month deferral of the planned development scope.

Anglo said, during the first two years after an offer is successfully completed, development work on the project is expected to be broadly in line with Sirius’ revised development plan “although Anglo American intends to update the development timeline, optimise mine design and ensure appropriate integration with its own operating standards and practices”.

It added: “Anglo believes that the project has the potential to become a world-class, low-cost and long-life asset. Sirius has progressed the development of the project to an advanced stage, with construction now under way for over two years.

“Sirius has indicated that this is currently the world’s largest known high-grade polyhalite deposit with a JORC reserve of 290 Mt, with a grade of 88.8%, and a resource of 2,690 Mt. The resource indicated by Sirius has the scale, thickness and quality to be mined efficiently using bulk mining methods through a relatively simple, low-energy, non-chemical production process.”

In addition, Sirius has indicated the project could operate at an EBITDA margin potentially well in excess of 50%, according to Anglo, leaving the project well positioned for strong through-the-cycle profitability with a long anticipated asset life.

“At this stage, the project requires a significant amount of further financing to develop and commission the operation that has proven challenging for Sirius to procure on an economic basis,” the diversified miner said. “Anglo American, as one of the world’s leading mining companies, has the resources and capabilities to help build on the achievements of the Sirius team. Anglo American remains committed to its disciplined capital allocation framework.”

Anglo explained that there is potential long-term benefits in applying its technical expertise in both the development and operational phases, as well as utilising its recognised Operating Model to drive safety and productivity to “world-leading standards”.

“Integration into Anglo American’s global marketing network would provide full mine-to-market capabilities and build on Anglo American’s institutional experience in the world’s major fertiliser markets,” it added.

Sirius’ polyhalite product, POLY4, is a multi-nutrient fertiliser certified for organic use and has the potential to generate demand at a competitive cost that supports a strong margin, according to Anglo.

“POLY4 is an attractive low-chloride alternative to traditional potassium-bearing mineral products on a cost-effective basis. It includes four of the six key nutrients that plants need to grow – potassium, sulphur, magnesium and calcium,” it said. “The use of fertilisers is one of the most effective ways to improve agricultural yields and therefore help to address the anticipated future imbalance between food, feed and biofuel demand and supply caused by a fast-growing global population and limited additional land availability for agricultural use.”