The US government is considering an investment of up to £70m in Plymouth's tungsten mine in a move that could generate hundreds of jobs.
Tungsten West Plc, the firm striving to fully operationalise the Hemerdon mine, has attracted interest from the Export-Import Bank of the United States (EXIM), the official export credit agency of the US government.
Earlier this month, Tungsten West told our sister site Plymouth Live about ongoing discussions with potential investors ahead of an investor presentation next month. Today, it announced it had received a non-binding letter of interest from EXIM concerning possible financial backing for the Hemerdon tungsten and tin mine, located in Plympton.
EXIM is mulling over a loan of up to US$95m, approximately £70m, repayable over a maximum period of 15 years under its Supply Chain Resiliency Initiative (SCRI), designed to lessen reliance on China. This funding hinges on an offtake agreement with US firms, which would purchase the tungsten at a predetermined price.
The US funds would form a substantial portion of the capital required to restart production at Hemerdon, potentially as soon as the end of next year. The project could yield around 20% of the world's primary tungsten supply outside China, marking it as immensely important to the West.
The SCRI's objective, as outlined in the letter of intent, is to bolster the supply of critical minerals for US firms, enhancing their competitive edge globally. EXIM has also pinpointed Hemerdon's possible connection with its China and Transformational Exports Program (CTEP), which mandates EXIM to counteract the effects of financial backing that China and other nations provide to their exporters, thereby aiding US exporters, reports .
Hemerdon is a candidate for financing based on sales of the tungsten to US buyers.
Should Hemerdon achieve its full production capacity, it could herald a significant employment surge for Plymouth, positively impacting the local economy.
The mine is expected to generate over 300 direct jobs at peak operation, spanning roles in mining, processing, and administration, alongside an estimated 1,200 indirect positions in sectors such as driving and construction.
Tungsten West's chief executive, Jeff Court, said: "The letter of interest from EXIM underlines Hemerdon's global critical minerals supply credentials and is reflective of its extensive potential. The project is poised to produce approximately 20% of global supply of primary tungsten from outside China, representing a strong opportunity to establish supply chain security in the many sectors that are reliant on tungsten.
"Whilst there are no assurances that this letter of interest will result in a financing commitment, it is a strong display of confidence in our investment case as we proceed with various funding discussions. I'd like to thank EXIM for their positive engagement to date, and I look forward to updating shareholders with progress on these conversations."
Earlier this month, Mr Court informed PlymouthLive that the firm was optimistic about securing the necessary capital to launch the project after years of setbacks and the demise of former owner Wolf Minerals in 2018.
Tungsten West has compiled a comprehensive 700-page feasibility study for the Hemerdon mine, with proposals strengthened by a dramatic surge in tungsten ore prices.
The business believes it can extract the metal more cost-effectively and efficiently than its predecessor Wolf managed, presenting a significantly more appealing prospect for backers.
Requiring a minimum of £70m to start operations, the company has been engaging with investors, including those supported by º£½ÇÊÓƵ and European governments, alongside the US administration.
Additional backers include private equity firms, with Tungsten West targeting approximately 20 funders to provide either debt or equity financing, or a mixture of both.
Mr Court, who assumed control last October, said the company was seeking investment rather than grants - aiming to deliver returns to its backers. The objective is to secure the funding before the year's end, enabling immediate commencement of construction on a new front-end at the mine's processing plant.
This is where the ore extracted from the open cast mine undergoes crushing, screening, stockpiling and sorting.
Approximately one-third will then proceed to the main processing plant and emerge as market-ready tungsten. The introduction of the new crushing and screening unit would enhance operational efficiency compared to the era of Wolf Minerals.
