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Tungsten West (AIM:TUN) announced Tuesday that the UK Government will invest up to $97 million (£71 million) to restart production at the historic Hemerdon tungsten and tin mine in Devon. The stock soared.
The equity and debt investment comes from the National Wealth Fund (NWF) and aims to get the mine back to full production and develop a secure domestic tungsten source, a critical mineral essential to high-technology supply chains, aerospace, energy and defence.
The mine supplied crucial tungsten for military and defense efforts during both World War I and World War II. Mining continued on and off through the mid-20th century before shutting down in 1944.
“This investment will supply vital minerals to British defence, energy and aerospace businesses and keep good, well-paid jobs in the UK. All part of this Government’s commitment to drive growth in every postcode, back British business and keep our country safe,” John Healey, Chancellor of the Exchequer, said in a news release.
Tungsten West and NWF now have a shareholder relationship agreement, which gives the NWF the chance to nominate one non-executive director to the board of the company. The investment makes it possible for Tungsten West to resume full production at Hemerdon, producing tungsten and creating 350 direct jobs.
Production to resume soon
Tungsten and tin concentrate have already been produced in Hemerdon in this past month, the company said, as they conduct final tests to start production still in 2026. The company also said it is negotiating with a major down-stream tungsten refiner.
“Hemerdon is a world class, low cost and long-life tungsten and tin resource in the UK. Through the support of the UK Government, we are ensuring that critical minerals produced at Hemerdon will underpin the UK’s national interests for the long term,” Jeff Court, CEO of Tungsten West, said.
Bloomberg News reported that Hemerdon had faced difficulties to restart the mine due to cost overruns, volatile prices and funding constraints previously.
Tungsten West’s shares were up about 17% at 50.25 pence a share by 12:24 p.m. in London, valuing the firm at about £627 million ($855 million).
(With files from Bloomberg)
