It is likely Plymouth’s closed tungsten mine could be reopened following its £2.8million sale to a newly formed company.
The large tungsten and tin mine, at Hemerdon on the edge of the city, shut when previous owner, Australian specialty metals firm Wolf Minersals Ltd, was liquidated in late 2018 after losing £100million.
But Drakelands Restoration Ltd took over the site in 2019 and its parent firm has now sold it to Tungsten West Ltd, in a cash deal.
It is understood Tungsten West is keen to restart production at the mine, even though industry experts have said restarting production could cost as much as £40million.
Drakelands Restoration Ltd is a subsidiary of property and mining giant Hargreaves Services Plc, which has confirmed it is to continue working at the site, where it has been engaged in safeguarding and maintaining the land via its subsidiary company.
Hargreaves has signed a decade-long mining services contract, worth £1million a year for eight years starting by 2021, to carry out similar services to those it was engaged in at the mine during Wolf Minerals’ tenure.
Shares in Durham-based Hargreaves jumped 6.3% when the deal to sell Drakelands Restoration Ltd to Tungsten West was announced to the stock exchange.
Gordon Banham, Hargreaves chief executive, said: "We have worked closely over the last year with the many stakeholders of the former tungsten mine at Hemerdon.
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"We are pleased to have achieved a solution that creates the opportunity for future tungsten production at the mine with associated local employment and provides our shareholders with substantial medium term earnings potential."
Wolf Minerals lost a jaw-dropping £100million in just three years at Drakelands mine.
It failed to produce enough metal, saw global prices hit the floor and was saddled with enormous debts.
There had been fears the mine, where work started in 2007, could close as early as 2016 because of financial problems.
But Wolf clung on until it finally went into administration on October 10, 2018, with a debt mountain of about £70million.
Wolf Minerals wound up having to tell the London Stock Exchange it was no longer in a position to meet its short term working capital requirements and ceased trading immediately, sending home more than 200 workers.
But in mid-2019 the Government confirmed a new business called Drakelands Restoration Ltd had acquired the mine, and some of the assets on the site.
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Drakelands Restoration Ltd was incorporated in March 2019, alongside Drakelands Mine Restoration Ltd and Drakelands Holdings Ltd.
Drakelands Restoration is a subsidiary of Durham’s Hargreaves Services, which lost £8.1million when the mine closed and later announced £9.9million losses and job cuts,
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Hargreaves always said it was not considering operating the mine and has now offloaded it to London-based Tungsten West, a firm incorporated in 2019 after previously being called Front Five Holdings.
In a statement to the Stock Exchange, Hargreaves said Tungsten West “has acquired control of the Hemerdon mine with a view to recommencing tungsten mining operations in due course”.
Hargreaves said it had been in talks with Devon County Council, the Environment Agency and various landowners regarding the future of the tungsten mine, after having acquired freehold and leasehold properties and an assignment of the minerals lease.