Key facts
- The UK government's National Wealth Fund is investing £71 million in Tungsten West.
- The investment includes a £36 million share purchase, giving the government a 7.4% stake and a board seat.
- A £25 million loan facility is also part of the funding package.
- The Hemerdon mine in Devon is expected to reopen, creating an estimated 350 direct jobs.
- The government has the option to buy up to half of the mine's future tungsten output.
- Mining operations are scheduled to restart in the third quarter.
The UK government, through its National Wealth Fund, is set to invest £71 million in Tungsten West to facilitate the reopening of the Hemerdon mine in Devon. This significant funding package comprises a £36 million share purchase, which will secure a 7.4% stake and a board seat for the government, and a £25 million loan facility.
The initiative is projected to stimulate the South West of England's economy by creating approximately 350 direct jobs. Furthermore, the government will secure an option to acquire up to half of the mine's future tungsten production. John Healey, the Chancellor, emphasized that this investment is crucial for supplying essential minerals to the UK's defence, energy, and aerospace sectors, thereby sustaining well-compensated employment within the country.
Tungsten West, based in Plympton, Devon, focuses on mining and extracting tungsten, tin, and secondary aggregates. Jeff Court, CEO of Tungsten West, highlighted the importance of prioritizing domestic requirements for tungsten to support strategic initiatives in defence and next-generation energy.
The Hemerdon Mine, formerly known as Drakelands Mine, ceased operations in October 2018 when its previous operator, Australian firm Wolf Minerals, entered liquidation. Tungsten West acquired the site in 2019 and has since undertaken extensive redesigns of its processing facilities and obtained new environmental permits. The newly secured capital will be used to rebuild and upgrade processing equipment, cover operational costs, and fund the labor necessary for full metal production.
The London-listed firm indicated that the government's shares will be officially listed on the stock market on August 27, with mining operations expected to resume in the third quarter. This move represents a strategic deployment of the National Wealth Fund to bolster the government's agenda in critical markets like defence and energy. Previously, the fund provided a £599 million financing package for Rolls-Royce Small Modular Reactors (SMR) in collaboration with Great British Energy, aiming to de-risk the project and attract further private investment.