Bosses say end goal remains to restart mine
BOSSES at Plymouth’s vast tungsten mine have vowed they are committed to restarting production, after mounting costs caused them to put plans on hold.
James McFarlane, managing director for Tungsten West Plc, stressed the company had plenty of cash but would have to look at cutting costs after suffering huge hikes in the price of energy and materials – partly because of the war in Ukraine.
As recently as February, bosses at Tungsten West had been looking at having the Hemerdon Mine in full production by 2023, but now they have started a full review after a huge shift in the economic landscape. The company will look to rethink its development plans to consider alternative restart scenarios, with the aim of reducing capital expenditure and operating costs.
Bosses said they will accelerate feasibility studies for a number of upgrades to the project and intend to announce revised plans later this year. Mr McFarlane stressed: “We remain entirely committed to our purpose of restarting the Hemerdon mine, whilst operating in the best interests of all stakeholders.”
He said the firm was not alone in suffering the pain of inflation, but added: “We are extremely well positioned to minimise our exposure to these factors. We have many of the essential ingredients needed to successfully restart the mine: a huge amount of tungsten, tin and aggregates, plus existing planning permission, a pre-stripped open pit, equipment and extensive knowledge and skills on site.
“Our end goal has not changed but how we get there will look different to what was originally planned. We believe this is a wise decision to secure the future success of this hugely important strategic project to the UK and western world.”
Tungsten West bought the mine out of receivership for £2.8 million in 2019 when previous owner Wolf Minerals went into liquidation. It has already started on a £45m rebuild of the processing plant at the mine, on the edge of Plympton, and had agreed terms for a £36m loan from global investment firm Orion Resource Partners. But that was before Russia invaded Ukraine, pushing up energy prices internationally.
Tungsten West has now announced a review of its current plans in light of what it called “unprecedented rises in the cost of consumables”. To enable the review to take place, the company’s board has taken the decision to pause the rebuild of its Mineral Processing Facility and avoid making additional major financial commitments, whilst it considers how to offset the impact of global rises in the price of steel, cement, diesel and electricity.
Mr McFarlane said: “We continuously assess our costs and supply chain using strict criteria and since our original feasibility study was carried out there have been steep rises in materials and energy costs, which have resulted in the need to review our existing plans.
“Whilst the value of the project and the demand for tungsten, tin and aggregates remains high, it makes sense to take stock and look at other options for re-starting the mine, whilst we are in a strong financial position. It’s the responsible thing to do for shareholders and staff.”
The mine has the third-largest tungsten resource in the world, a critical material needed for progressive technologies.