Mining giant Anglo American has said it will slow down development of a £7 billion North Yorkshire fertiliser mine and revealed plans to break up major parts of the business.
It comes a day after the FTSE 100 firm rebuffed a second takeover bid, worth £34 billion, from Australian rival BHP.
The company has come under pressure to show it can deliver value for investors in the face of the takeover interest.
Anglo American told shareholders on Tuesday that it plans to sell or demerge its De Beers diamond business, Anglo American platinum and coking coal assets.
Anglo American accelerates delivery of strategy to unlock significant value.https://t.co/LkFBBTejIl pic.twitter.com/5V5UR3ne0E
— Anglo American (@AngloAmerican) May 14, 2024
It said it has already witnessed “strong buyer interest” for the coal operation.
The firm will now focus on its copper, iron ore and crop nutrients businesses.
Duncan Wanblad, chief executive of Anglo American, said: “We set out our clear strategic priorities earlier this year – operational excellence, portfolio simplification and growth.
“Our decision to focus Anglo American’s portfolio in our world-class resource asset base in copper and premium iron ore – while retaining our crop nutrients optionality at Woodsmith – marks a major new phase in executing our strategy.
“We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction.”
The company also said it will continue efforts to cut costs and reduce its debt leverage on its balance sheet.
This will see the company slow down work on its Woodsmith fertiliser project in North Yorkshire, heavily reducing its investment plans for the site.
I know a number of constituents will be very concerned by the bad news coming out of Anglo American this morning ⬇️ – so am I.
They have set out their intention to slow down the pace of their Woodsmith Mine development dramatically. (1/) pic.twitter.com/9nHIjbuVB7
— Simon Clarke MP (@SimonClarkeMP) May 14, 2024
The project near Whitby, which was taken over by Anglo American in 2020, involves extracting a nutrient-rich fertiliser called polyhalite and then transporting it to a processing facility via a 23-mile tunnel.
Anglo American has already invested heavily in the project and had committed to spend around 1 billion dollars (£800 million) each year.
However, the firm said it will cut this to 200 million dollars (£159 million) in 2025 and no expenditure in 2026 to help the group’s finances.
The announcement drew criticism from local politicians, with Simon Clarke, Conservative MP for Middlesbrough South and East Cleveland stating he was “very concerned”.