Tungsten West, the company responsible for the development of the Hemerdon Mine on the outskirts of Plymouth, has today announced a review of its current plans in light of 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.
James McFarlane, Managing Director for Tungsten West, explains: “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 our various stakeholders, including shareholders and staff.”
Tungsten West’s balance sheet position stood at £28M in cash reserves as at 31 March 2022 and it has not yet drawn down the Finance Facility from investors Orion.
Mr McFarlane continued: “We will also use this time to review the proposed investment in the aggregates plant and identify methods to produce this secondary product more efficiently, both operationally and from a cost perspective. We are taking into account feedback from the recent public consultation we held in March and will use all the information gathered to consider alternative options.”
Tungsten West will now look to rethink its development plans to consider alternative restart scenarios, with the aim of reducing capital expenditure and operating costs. The Company will accelerate feasibility studies for a number of upgrades to the project that have previously been identified.
Mr McFarlane said: “It’s clear we are not alone in feeling the impact of the current unprecedented global economic challenges. Whether mines around the world are in production or in development stages, rising costs are having an impact. However, 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, tine and aggregates, plus existing planning permission, a pre-stripped open pit, equipment and extensive knowledge and skills on site.
“We remain entirely committed to our purpose of restarting the Hemerdon mine, whilst operating in the best interests of all stakeholders. 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.”
The Hemerdon Mine has the third largest tungsten resource in the world, a critical material needed for progressive technologies, including automotives, electronics, medical equipment, manufacturing and defence. It is also considered a conflict mineral because, like diamonds, it originates from parts of the world where its production is used to directly fund conflict. Tungsten also makes it onto critical raw materials lists for countries around the world including the US and EU, which means it is a resource in high demand.
Tungsten West will announce revised plans later this year.