REG - Anglo American PLC - Anglo American upgrades scope of Woodsmith project

Anglo AmericanAnnouncement

10/12/2021 07:05

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RNS Number : 1997V  Anglo American PLC  10 December 2021

 10 December 2021
 Anglo American upgrades scope of Woodsmith polyhalite fertiliser project to
 optimise long term value

Anglo American has conducted a detailed technical review of the Woodsmith
polyhalite project in the UK since mid-2020 to ensure the technical and
commercial integrity of the full scope of its design. Now largely complete,
the review has confirmed the findings of Anglo American's due diligence that a
number of elements of the project's design would benefit from modification to
bring it up to Anglo American's safety and operating integrity standards and
to optimise the value of the asset for the long term.

 

Anglo American is also making a change to the leadership of the project
following its integration into Anglo American and ahead of the full project
execution phase. Tom McCulley, who has led the development of the Quellaveco
copper project in Peru, will take over from Chris Fraser as CEO of Crop
Nutrients. After 12 years of driving the project from inception to its
position today, Chris Fraser will step aside and take on a strategic projects
role for Anglo American.

 

Woodsmith project update

 

The Woodsmith team is further developing the engineering to optimise the
configuration of the project, recognising the multi-decade life of the mine.
Particular attention is on those aspects identified at the outset of Anglo
American's ownership - namely, the sinking of the two main shafts, the
development of the underground mining area, and the changes required to
accommodate both increased production capacity and the more efficient and
scalable mining method of using only continuous miners; such improvements will
also require the installation of additional ventilation earlier in the
development of the underground mining area.

 

Anglo American expects that these changes to the design of the mine
infrastructure - which will result in a different, enhanced configuration and
therefore a different construction and production ramp-up schedule - will
ensure that its exacting standards are met and the full commercial value of
the asset is realised.

 

Mark Cutifani, Chief Executive of Anglo American, said: "We are very happy
with the high quality and exciting potential of Woodsmith, with the scale and
quality of the polyhalite orebody pointing to a Q1 operating cost position and
strong margins. This is a very long-life asset and we are going to take the
necessary time to get every aspect of the design right to match our long term
vision and value aspirations.

 

"We have said from the outset that we expect to make improvements and that we
will execute certain elements of the construction differently and with a more
conservative schedule. We expect to have completed our design engineering,
capital budget and schedule at the end of 2022, with a fully optimised value
case that recognises the upside potential we see in Woodsmith, and we will
then submit the full project to the Board."

 

In the meantime, construction of the major critical path elements of the
project, principally the two main shafts and the mineral transport tunnel, is
progressing, with approximately $0.7 billion of capital expected to be
invested in 2022.

 

Anglo American's development of the market for its POLY4 fertiliser product
continues to demonstrate the benefits of its multi-nutrient, low chloride
characteristics on the full breadth of crops at commercial scale.  Beyond its
crop yield and quality benefits over other bulk fertiliser products, the value
of the product in the market is also expected to be enhanced by its positive
environmental properties - a very low carbon footprint given minimal
processing requirements, its natural ability to improve soil health, and its
certification for organic use.

 

Woodsmith leadership change

 

With the project's integration into Anglo American complete, Mark Cutifani
added: "We are enormously grateful to Chris Fraser for his founding vision
over some 12 years in bringing Woodsmith to reality - a project with
sustainability principles at the core of its design and in the product itself.
His dedicated leadership in progressing the project this far and integrating
it into our organisation, and doing so while making considerable construction
progress during the upheavals of the pandemic, also deserves enormous credit.
As we move towards full project execution, it is a natural time for Chris to
step into a new role and I'm pleased that we will benefit from his experience
as he works with us on a number of strategic projects.

 

"I am delighted that Tom McCulley, currently CEO of Anglo American in Peru,
who has so skilfully steered our Quellaveco copper project to a point of
pre-commissioning, on time and on budget, will now lead the development of
Woodsmith as CEO of our Crop Nutrients business. I am confident that Tom and
his team will finalise our plans and then deliver the project we all envisage
safely and with great precision."

 

The changes to Tom McCulley's and Chris Fraser's roles are effective 1 January
2022. Anglo American has appointed Adolfo Heeren as CEO of Anglo American in
Peru, effective 1 January 2022. Adolfo will work together with Tom McCulley
during the first half of 2022 to ensure a smooth transition from the
construction and commissioning phase of Quellaveco into operations, expecting
first copper production in mid-2022.

 

Notes to editors:

 

Tom McCulley, age 53, has served as CEO of Anglo American in Peru since 2018
and Group Head of Projects for Anglo American since he joined Anglo American
in 2015. Tom brings more than 25 years of international experience in major
projects across the mining, oil and gas industries, and has led the
development of Anglo American's Quellaveco copper project in Peru that is
expected to come onstream in mid-2022. Prior to joining Anglo American, he
held several senior global roles at Newmont, including Vice President of
Investment and Value Management and Vice President of Discovery and
Development Planning and Services. Tom began his career at Fluor Corporation
in international oil and gas and mining projects, developing his full project
lifecycle expertise.  Tom has a Bachelor of Science in Accounting from Mount
Saint Mary's University, Emmitsburg, USA.

 

Adolfo Heeren, age 52, served as CEO of TgP and Coga, the Peruvian gas
transport company and its operating company, between 2015 and 2020 and as CEO
of Calidda, the Peruvian natural gas distribution company, between 2011 and
2015. Prior to that, Adolfo spent 15 years with Shell in a number of
commercial, planning and finance roles across South America, ultimately as
Chair of Shell in Peru. He brings extensive experience in the responsible
development of large investment projects in the region, both at the asset
level and as the senior most executive at a national level. Adolfo has a
degree in Industrial Engineering from the Pontifical Catholic University of
Peru and an MBA from the Adolfo Ibañez University in Chile.

 

 

Anglo American is a leading global mining company and our products are the
essential ingredients in almost every aspect of modern life. Our portfolio of
world-class competitive operations, with a broad range of future development
options, provides many of the future-enabling metals and minerals for a
cleaner, greener, more sustainable world and that meet the fast growing every
day demands of billions of consumers. With our people at the heart of our
business, we use innovative practices and the latest technologies to discover
new resources and to mine, process, move and market our products to our
customers - safely and sustainably.

 

As a responsible producer of diamonds (through De Beers), copper, platinum
group metals, premium quality iron ore and metallurgical coal for steelmaking,
and nickel - with crop nutrients in development - we are committed to being
carbon neutral across our operations by 2040. More broadly, our Sustainable
Mining Plan commits us to a series of stretching goals to ensure we work
towards a healthy environment, creating thriving communities and building
trust as a corporate leader. We work together with our business partners and
diverse stakeholders to unlock enduring value from precious natural resources
for the benefit of the communities and countries in which we operate, for
society as a whole, and for our shareholders. Anglo American is re-imagining
mining to improve people's lives.

www.angloamerican.com (http://www.angloamerican.com)

 

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For further information, please contact:

 

 Media                                                                              Investors

 UK                                                                                 UK

 James Wyatt-Tilby                                                                  Paul Galloway

 james.wyatt-tilby@angloamerican.com                                                paul.galloway@angloamerican.com (mailto:paul.galloway@angloamerican.com)
 (mailto:james.wyatt-tilby@angloamerican.com)

                                                                                  Tel: +44 (0)20 7968 8718
 Tel: +44 (0)20 7968 8759

                                                                                  Juliet Newth
 Marcelo Esquivel

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 marcelo.esquivel@angloamerican.com (mailto:marcelo.esquivel@angloamerican.com)     (mailto:juliet.newth@angloamerican.com)

 Tel: +44 (0)20 7968 8891                                                           Tel: +44 (0)20 7968 8830

 Katie Ryall                                                                        Michelle Jarman

 katie.ryall@angloamerican.com (mailto:katie.ryall@angloamerican.com)               michelle.jarman (mailto:michelle.jarman@angloamerican.com) @angloamerican.com

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 Tel: +44 (0)20 7968 8935

                                                                                  Tel: +44 (0)20 7968 1494

 South Africa

 Nevashnee Naicker

 nevashnee.naicker@angloamerican.com

 Tel: +27 (0)11 638 3189

 Sibusiso Tshabalala

 sibusiso.tshabalala@angloamerican.com
 (mailto:sibusiso.tshabalala@angloamerican.com)

 Tel: +27 (0)11 638 2175

 

 

Forward-looking statements:

This document includes forward-looking statements. All statements other than
statements of historical facts included in this document, including, without
limitation, those regarding Anglo American's financial position, business,
acquisition and divestment strategy, dividend policy, plans and objectives of
management for future operations (including development plans and objectives
relating to Anglo American's products, production forecasts and Ore Reserve
and Mineral Resource positions) and environmental, social and corporate
governance goals and aspirations, are forward-looking statements. By their
nature, such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Anglo American or industry results to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements.

 

Such forward-looking statements are based on numerous assumptions regarding
Anglo American's present and future business strategies and the environment in
which Anglo American will operate in the future. Important factors that could
cause Anglo American's actual results, performance or achievements to differ
materially from those in the forward-looking statements include, among others,
levels of actual production during any period, levels of global demand and
commodity market prices, mineral resource exploration and development
capabilities, recovery rates and other operational capabilities, safety,
health or environmental incidents, the effects of global pandemics and
outbreaks of infectious diseases, the outcome of litigation or regulatory
proceedings, the availability of mining and processing equipment, the ability
to produce and transport products profitably, the availability of transport
infrastructure, the impact of foreign currency exchange rates on market prices
and operating costs, the availability of sufficient credit, the effects of
inflation, political uncertainty and economic conditions in relevant areas of
the world, the actions of competitors, activities by courts, regulators and
governmental authorities such as in relation to permitting or forcing closure
of mines and ceasing of operations or maintenance of Anglo American's assets
and changes in taxation or safety, health, environmental or other types of
regulation in the countries where Anglo American operates, conflicts over land
and resource ownership rights and such other risk factors identified in Anglo
American's most recent Annual Report. Forward-looking statements should,
therefore, be construed in light of such risk factors and undue reliance
should not be placed on forward-looking statements. These forward-looking
statements speak only as of the date of this document. Anglo American
expressly disclaims any obligation or undertaking (except as required by
applicable law, the City Code on Takeovers and Mergers, the UK Listing Rules,
the Disclosure and Transparency Rules of the Financial Conduct Authority, the
Listings Requirements of the securities exchange of the JSE Limited in South
Africa, the SIX Swiss Exchange, the Botswana Stock Exchange and the Namibian
Stock Exchange and any other applicable regulations) to release publicly any
updates or revisions to any forward-looking statement contained herein to
reflect any change in Anglo American's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.

 

Nothing in this document should be interpreted to mean that future earnings
per share of Anglo American will necessarily match or exceed its historical
published earnings per share. Certain statistical and other information about
Anglo American included in this document is sourced from publicly available
third party sources. As such it has not been independently verified and
presents the views of those third parties, but may not necessarily correspond
to the views held by Anglo American and Anglo American expressly disclaims any
responsibility for, or liability in respect of, such information.

 

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