Anglo American says it will invest a further £530m into the Woodsmith fertiliser mine in 2022 to tweak its construction.
The announcement comes as it was also revealed the project’s founder Chris Fraser will also be leaving the business.
Anglo American has excavated about two-thirds of the 23-mile tunnel between the Whitby mine and its Teesside plant.
And the firm says the additional investment will be used to continue work on mine shafts and the transportation tunnel.
Anglo – which acquired the former Sirius Minerals project last year – has been carrying out a detailed technical review of the Woodsmith polyhalite project.
It now says 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”.
In a statement to investors, Anglo American says construction of the major elements of the project is progressing, and approximately $700m (£530m) of capital is expected to be invested in 2022.
It said: “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.”
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.”
The announcement comes two months after Anglo American added a “significant impairment charge” of £535m to the multibillion-pound project it acquired last year from Sirius Minerals – £130m more than it originally paid.
It bought the project for £405m last March after Sirius Minerals failed to secure £410m worth of government bonds, which left it on the brink of financial collapse.
That virtually wiped out the shareholdings of thousands of small private investors, causing them to lose “significant sums.”
In December 2020, Anglo announced it was investing £375m in the project during 2021, an increase on the £225m it had previously committed to spending.
Meanwhile, Chris Fraser, the project’s founder, has decided to step down as the project’s CEO to move to a strategic projects role for Anglo American.
He will be replaced by Tom McCulley, who has led the successful development of the company’s huge Quellaveco copper project in Peru.
Mr Fraser said: “The Woodsmith Project continues to deliver huge investment on the North Yorkshire Coast and on Teesside and has created thousands of jobs since its creation.
“I am incredibly proud of the hardworking team at Anglo American that work tirelessly to deliver this project, which is not only benefiting local communities but also contributes to the UK economy and will eventually help to improve fertiliser practices and food production around the world, bringing significant environmental benefits.”