Anglo American PLC (LSE:AAL) is facing calls from one of its top investors to close Woodsmith, the fertiliser mine in North Yorkshire, due to concerns over its financial viability.
Dawid Heyl, portfolio manager at Ninety One, which holds a 1.5% stake in Anglo worth approximately £500 million, has voiced doubts about the profitability of the project.
“They should just leave it and shutter the whole plan. I don’t think there is a market for polyhalite of that size,” Heyl told the Sunday Times.
“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.”
Woodsmith, which upon completion would be the largest known deposit of natural fertiliser polyhalite, currently employs some 2,000 workers, however, these jobs could be at risk.
Pressure to close the mine has been growing, especially after last week, when Anglo took a US$1.6 billion write-down due to the development of the site.
A final investment decision will be made in due course as part of a restructuring of its businesses following a failed bid from BHP.
Last week, Anglo reported an 8% decline in revenue for the six months ending June 30, 2024, dropping from US$15.7 billion to US$14.5 billion.
Despite the setback, the miner said it has “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.”