Mining operations remain at a standstill
New owners have taken over Plymouth’s tungsten mine, but digging is unlikely to resume soon, reports William Telford
PLYMOUTH’S Drakelands mine has a new owner – but it is unlikely any tungsten will be dug out of the ground.
The company now in charge at the open cast Hemerdon site is associated with a firm that lost £8million when the mine closed suddenly in 2018 and has also just announced huge losses and job cuts.
And with the cost of reopening the mine being put at about £40million by industry experts, the chances of tungsten and tin being dug look slight.
But the Government has confirmed a new business called Drakelands Restoration Ltd has acquired the mine, and some of the assets on the site.
It appears the Hemerdon site, where previous owner Wolf Mineral Ltd went into liquidation owing £70million a year ago, is now being restored – but it is not expected mining will restart, at least not soon.
Drakelands Restoration Ltd was incorporated in March 2019, alongside Drakelands Mine Restoration Ltd and Drakelands Holdings Ltd.
All three firms have an address in West Terrace, Esh Winning, Durham,
the same address as huge industrial, property and mining giant Hargreaves Services Plc.
Drakelands Restoration is one of a number of Hargreaves group companies listed under Hargreaves Corporate Director Ltd at Companies House.
A Hargreaves spokeswoman told website Plymouth Live: “Hargreaves hasn’t bought the mine but is continuing to work with the key stakeholders to determine what the future of the mine might be.”
Hargreaves reported a £9.9million before-tax loss in May 2019 and its report to the Stock Exchange revealed it lost £8.1million when its customer, Drakelands’ Wolf Minerals, went belly up.
The report said: “The group continues to have a small presence at the Hemerdon mine site where it is carrying out minor maintenance and asset safeguarding activities.
“The future of the site remains unclear, but Hargreaves is well positioned to secure any restoration or other work which may arise in due course.”
But it categorically said: “Hargreaves is not considering operating the mine.”
A Department for the Environment spokesman said: “Some assets, including the mine, was bought from Wolf Minerals by Drakelands Restoration Ltd earlier this year. I believe the firm is coordinating the restoration of the area.”
Debt-laden Hargreaves has been making a transition from its historic roots in the UK’s coal mining industry to the property sector, and said in 2019 it plans to cut jobs amongst its 2,000-strong workforce in order to reduce costs.
During the past four years Hargreaves has already made 300 redundancies, allowing it to save £14million.
Hargreaves, which has a net debt of £17.9million, also took an £8million hit from the collapse of British Steel, another key customer.
Those figures pale next to the losses incurred by Australia’s Wolf Minerals. The tungsten mine lost £100million in just three years because it failed to produce enough metal, saw global prices hit the floor and was saddled with enormous debts.
The future of the site remains unclear, but Hargreaves is well positioned to secure any restoration or other work
There had been fears the Drakelands mine could close as early as 2016, and so when the specialty metals producer finally went into administration on October 10, 2018, with a debt mountain of about £70million, it seemed like the inevitable conclusion to a doomed venture.
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.
In November 2018 Pala Investments – owned by one of the world’s richest men, Vladimir Iorich – was considering pumping £25million into the tungsten mine. Pala had even deposited about £14million into safekeeping ready to use at the mothballed mine.
But talks foundered over the cost of restoring the land after its working life has finished. Industry sources suggested at least two other parties were keen on restarting mining at Hemerdon, but it could cost up to £40million to achieve this.