Anglo American says it expects the workforce at Whitby's Woodsmith mine to reduce by sixty percent as the company slows down construction work.
1,600 people are currently employed on the project, many for subcontractors.
Providing an update to Whitby Town Council this week, Matt Parsons from the firm said Anglo American's own redundancy process is already underway.
The number of people working on the Woodsmith mine project is expected to reduce by 60 percent by the middle of next year.
It comes as mine owner Anglo American "slows down" construction work at the site.
The company is already consulting with staff on redundancies and Matt Parsons from the firm told Whitby Town Council that contractors working on the site are doing the same.
Anglo American has fought off three unsolicited takeover attempts this year and as a result accelerated a strategic review of the company which was already underway, that review concluded that the companies future should be focused around Iron Ore, Copper and Crop Nutrients with other areas of the business being demerged, spun off in to stand-alone companies or sold.
The focus on Crop Nutrients is good news for the Woodsmith project, which is focused on mining Polyhalite for use in fertilisers, but the company says it's restructuring will put pressure on it's balance sheet hence the slow down in capital expenditure at Woodsmith and slow down in construction works.
Matt Parsons says the plan is to be able to "ramp-up" construction work again as soon as the balance sheet allows.
The company says the Woodsmith Mine remains integral to the companies growth but says that in the short term it will "slow down" the development of the project reducing it's capital investment to $200m next year and nothing the year after that, although the site will continue to have an operational budget.
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