Mining giant Anglo American has announced it will reduce capital investment into the Woodsmith fertiliser mine near Whitby from a planned $1bn (£800m) a year until 2027 to $200 (£160m) next year and nothing in 2026.

The announcement follows Anglo’s rejection yesterday of a £34bn takeover bid by Australian rival BHP. It rejected a previous £31bn bid from BHP in April.

Woodsmith project, a deep potash and polyhalite mine in the North Yorkshire Moors south of Whitby, employs around 1,600 people. The mine was started in 2017, and was acquired by Anglo American when it took over Sirius Minerals in 2020.

Polyhalite is a naturally occurring mineral containing potassium, sulphur, magnesium and calcium – four of the six key nutrients required for plant growth. It will be sold as a multi-nutrient fertiliser suitable for organic use that can boost crop yields and aid more sustainable farming. Plans call for an underground conveyor belt, the Woodsmith Mine Tunnel, to transport mined nutrients to a processing plant at Wilton in Teeside, some 23 miles away.

The mining giant now plans to simplify its business by divesting or demerging several of its subsidiaries, including Anglo American Platinum and its De Beers diamond business, but said this would allow it to focus on its crop nutrients, copper and premium iron ore businesses.

Anglo said it remains committed to Woodsmith, and its reduction in investment was a slow down in development to support balance sheet deleveraging, while critical technical studies are completed in 2025. They say the Woodsmith project will set new standards for sustainable mining while helping to boost food production and sustainable farming practices.

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.”

Wanblad added, “Of course, we are conscious of the impacts of making such far-reaching changes, particularly on our employees. We see considerable opportunities for our employees, both in delivering the full potential of Anglo American and in the businesses that we will be divesting or demerging, all of which are high quality businesses in their own right. By implementing these portfolio changes ourselves, we will be able to do so in a manner that is respectful of our employees, host communities and countries.”