As Woodsmith mine is mothballed, job losses will have a seismic impact on the community in Whitby

The site of Britain's biggest mining development is a hive of activity. Builders and engineers are working to sink twin shafts that are both almost one-mile deep at the Woodsmith fertiliser project near the picturesque seaside town of Whitby.

Under the North York Moors National Park, another team is racing to drill a 23-mile tunnel that will connect Woodsmith to Teesside.

Woodsmith was billed as a transformational project. Hopes were that it could produce so much fertiliser, its economic value could be as much as 4 per cent of Britain's entire national income.

That is not how it has turned out. The bustle is set to end within months after the mine's owner, Anglo American, pledged to dramatically cut investment. Locals believe that move is 'a disaster'.

The Mail on Sunday can reveal that the starting gun has been fired on mass job cuts at Woodsmith. Staff at a major contractor on the site were last week told that more than 300 people would be let go by the end of the year, a source in Whitby said.

In a hole: The North York Moors (top) and deep underground in the Woodsmith mine (above)

As many as 80 per cent of the site's 1,400 contractors could be affected in total, the Mail revealed last month.

This is deeply unhelpful for the Tories, who are desperate to hang on to seats in red wall areas such as nearby Teesside, and for Rishi Sunak, whose North Yorkshire constituency of Richmond – to be known as Richmond and Northallerton from the General Election – is only a few miles away.

Woodsmith's slowdown has alarmed Tories defending marginal seats in the surrounding area at the election next month.

Sir Simon Clarke, defending Middlesbrough South and East Cleveland, has called the slowdown a 'very unwelcome surprise'.

And Jacob Young, Tory candidate for Redcar, who won his seat in 2019 and has a slim 3,500 majority, urged Anglo American to reverse its decision. He said: 'If contractors are demobilised and staff are laid off then the project may never be restarted.'

Anglo American is due to make a public announcement on Woodsmith's future later this month. However, the company told The Mail on Sunday it would 'gradually' halve its own workforce to 160 people over the coming year.

The slowdown will bring development to a halt, putting the partially complete mine into hibernation. It will leave a skeleton staff to help with basic maintenance.

The local economy is braced for the shock of losing the business provided by the mine contractors and the delay to the creation of permanent jobs at Woodsmith.

It brings back bad memories for many.

People here have seen other once-thriving industries, such as steel, wind down, leaving thousands with nowhere to go.

The upheaval at Woodsmith is part of a strategy put together last month by Anglo's chief executive, Duncan Wanblad, to help fend off a £39 billion takeover attempt by rival BHP.

Wanblad won – the deal was abandoned. Woodsmith, however, was collateral damage.

Anglo may not make a final decision on the future of the mine for a couple of years but the omens are not good. It is a huge setback for a project that began with high hopes eight years ago under the original developer, a now-defunct company called Sirius.

Such is the local concern that a task force is due to be set up by North Yorkshire County Council.

It will involve others, including Teesside Mayor Ben Houchen, to help subcontractors find alternative work. Carl Les, leader of Tory-controlled North Yorkshire County Council, said: 'The only positive thing is that the Teesside area is quite prosperous at the moment and there's a lot of other work going on which may provide opportunities for those affected by the slow-down.'

Les said areas of the wider local economy benefiting from the mine contractors range from hoteliers and those renting houses to cafe owners, pubs and retailers.

He said the project has helped widen the local economy from dependence on tourism.Anglo is seeking an investment partner – possibly in the form of another miner or a sovereign wealth fund – with which to share the huge cost of the project. John Cook, chairman of the Yorkshire Coast Mineral Association, a collection of farmers who lease their land to the mine, said Woodsmith would be a 'decent prospect' for a partner because its fertiliser reserves could be mined for 100 years.

He said: 'When Anglo American took over the mine there was optimism locally. They're a big quoted company and were seen as potentially being a safe pair of hands.'

Cook was one of thousands of small investors who put their faith and their money into Sirius Minerals back in 2015. He said: 'Like many people, I invested a bit of money in it as a small investor I felt a duty to back something that could be so huge for this area, I wanted to be part of it.'

He and an estimated 85,000 other individual investors, many of whom were locals, lost thousands of pounds or even their life savings when Sirius's share price collapsed. It was rescued by Anglo in a cut-price £400 million deal.

The grand plans unveiled by Sirius captured the imagination of a region brutalised by the loss of thousands of steel jobs in neighbouring Teesside.

The company was to construct two 4,900 feet shafts to reach a 230 feet mineral seam, making it the deepest mine in Europe.

Bad taste: Sackys Cafe owner Steve Swales will be affected

The polyhalite was then to be transported 23 miles in a tunnel to the company's processing plant at Teesside on a giant conveyor belt.

The project was originally due to be completed by 2021 but the most recent estimates for completion –before the slowdown was announced – were 2027. The timeline now is unknown.

The scale of job losses will have a seismic impact on Whitby.

Steve Swales, 50, owner of Sackys Cafe on the harbour, said: 'I know lads who gave up good jobs to go and work in the mine.

'Now we're hearing 80 per cent could lose their jobs.

'Make no mistake, a lot of job losses up at the mine will have a big effect on everything in this town.'

Frank Iddon, 66, is operations director of the Whitby Endeavour, a museum boat and restaurant dedicated to the legacy of explorer Captain James Cook.

'It is another blow the area could do without, especially after the loss of all the steel jobs on Teesside,' he said.

Peter Donichey, 70, was selling joke books to tourists on the harbour but felt the situation at Woodsmith Mine was no laughing matter. He said: 'I actually worked for Anglo American back in the 1980s in a gold mine in South Africa. It was a massive operation and I know the sort of money that company is worth because I've seen it first-hand.

Tom McCulley, chief executive of Anglo American's crop nutrients division, said: 'We are carrying out a full evaluation process of all workstreams to satisfy the new business plan.'