The company which owns Plymouth’s vast Hemerdon tungsten mine aims to have it in full production by the end of 2022 - but needs to raise £60m first.
Tungsten West Ltd, which bought the mine out of receivership for £2.8m in 2019, is confident of raising the cash and ramping up production at what is the western hemisphere’s second largest tungsten reserve.
That would mean up to 300 people being employed at the open cast site, on the edge of the city, and a knock-on benefit for the regional economy.
Max Denning, chief executive of Tungsten West, said: “We aim to be operating by the end of 2022 - and supplying 3% of the global demand for tungsten. But it is baby steps."
So first Tungsten West must raise capital to revamp the production facilities at the mine, where technical inadequacies were a major reason why Wolf Minerals Ltd, the former owner, fell into difficulties. It is already in talks with specialist mining investors about securing £40m and is planning to raise the remaining £20m by issuing shares.
About 30 staff are currently employed at the mine, with about half of them removing and repairing equipment in the production line. Other staff are working on ensuring environmental permissions are still up to date, while geologists and metallurgists are carrying out studies on the minerals that are buried, including tin.
Engineers are also planning how a revamp of the production facility will be carried out and there are geology, metallurgy and environmental science masters degree students on site too.
Once it has raised enough money, Tungsten West will then carry out this more intense revamp of the production facilities, with new equipment installed.
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That is key to the success of the project, with a central reason Wolf Minerals’ tenure failed being around production line problems which meant the process needed to be shut down for a lengthy period to put right.
But Wolf Minerals hadn’t the cash available, and consequently couldn’t afford a costly shut down. Tungsten West, which bought the mine debt-free, is now in a position to do this work before restarting production.
It will mean issues with the existing production equipment will be dealt with, with the added benefit of solving the low-frequency noise issues which caused some complaints from nearby residents when Wolf Minerals had the site.
In addition, Tungsten West aims to invest in new technology which will make the entire process more efficient, effectively using x-ray scanners to survey rocks and make sure they have enough tungsten in them to make it worthwhile crushing them and extracting the mineral. Rocks which do not pass the test can then be sold as aggregate for the construction industry.
Mr Denning said that since Tungsten West took over the mine it had carried out lab tests on the minerals and pilot plant trials on the production process and produced a 1,000-page feasibility report on how the production facilities can be revamped and how much it will cost.
“That has been positively received and the capital markets are excited about seeing the project restart,” he said. “We are now in the final stages of raising the funding.”
Mr Denning said once the cash is in place it will take about a year for the mine to be working at full capacity.
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With more than 10 years experience in the mining industry, and having worked in mines in Africa and South America, Mr Denning was able to spot a huge opportunity when Australian-owned Wolf Minerals went out of business. Tungsten West then swooped when a deal for receivers to sell the mine to a private equity company fell through.
Mr Denning said there is no doubt about the importance of the reserve at Hemerdon, with tungsten, used extensively in manufacturing, likely to be much sought after as the world seeks to build back better, and greener, following the Covid pandemic. And with nearly all the world’s tungsten reserves being in China, it makes the Plymouth lode strategically important too.
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“Being the second largest tungsten reserve in the western hemisphere is a big deal,” he said. “China has a relative stranglehold on production of tungsten concentrate, and this is a time when a lot of countries are questioning their supply chains. So to have a globally significant amount in the 海角视频, and on Plymouth’s doorstep, is amazing, and we should be proud of that.”
He also said that having the Hemerdon Mine in full production would have a huge economic impact on Plymouth and the South West. Tungsten West has already begun re-employing some of the specialist staff who worked for Wolf Minerals, and intends to take on more as the mine progresses.
While a few highly specialised jobs will have to be filled by candidates from outside the area, many more jobs will be available to local people. And there will be a huge boost for local firms in the supply chain.
“It’s really important for the local economy,” Mr Denning said. “And could be an enabler for economic expansion in the South West.”
Mr Denning also stressed that Tungsten West was keen to make contacts in the Plymouth business community and with the public - with him personally taking part in parish council meetings, for example.
“Stakeholder engagement is critical to everything we do,” he said.