$0.8 billion of capex for Woodsmith greenfield project for 2023
At Woodsmith, Anglo American’s next major greenfield project after Quellaveco, the company has approved $0.8 billion of capex for 2023, focused on shaft sinking and other critical infrastructure as part of its phased approach. Anglo American is improving the project’s configuration to ensure it realises 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 Anglo American’s ownership, and so potentially impact its carrying value of Woodsmith for accounting purposes at the year end.
Looking ahead, the company is even more positive today about the prospects for Woodsmith and its potential to become a high margin, major contributor to its diversified product portfolio given the outstanding nature of the resource and the premium pricing upside it expects to realise for Poly4 – the highly effective, low carbon fertiliser it will produce.”
Duncan Wanblad, Chief Executive of Anglo American, said: “Our mid-year commissioning and ramp-up of our new Quellaveco copper operation in Peru is testament to the determination of the entire team through the considerable adversity of pandemic disruption. Quellaveco alone increases our global production base by 10% and is the cornerstone of our margin-enhancing growth potential of 25% over the next decade, with further optionality beyond, focused on our future-enabling metals and minerals, from copper to crop nutrients. We are sequencing options appropriately, based on capital efficiency and returns, cognisant of balancing the current macro uncertainties with the compelling longer term supply and demand dynamics.
“The fundamental demand picture for mined metals and minerals is ever stronger as most of the world’s major economies accelerate their decarbonisation efforts and as the global population increases and continues to urbanise. We aim to keep growing our business into that demand, drawing on the range of margin-enhancing organic options within our business.”
Stephen Pearce, Finance Director of Anglo American, commented: “We have set up Anglo American as a resilient business through the cycle, both through the quality of the portfolio and our balanced approach to capital allocation. That balance supports investment in business improvement and value accretive growth, while also providing attractive shareholder returns through the cycle, translating into $7.5 billion in cash returns to shareholders in 2021 and 2022 to date. Our resilience also relies on having a highly competitive cost base – and we are acting to reduce the impact of inflation across our cost base and limiting the extent to which it is entrenched on the balance sheet through capex.
