Tungsten miner Wolf Minerals (LON:WLFE) is on the verge of opening the UK’s first metal mine for 45 years.
Wolf expects to sell the first tungsten from the Hemerdon pit in Devon in September after spending the last seven or so years developing it.
When it launches, the mine will be the only one of its kind in Britain and one of only relatively few around the world.
Wolf hopes to cash in on a global shortage of the hard and heavy metal.
Tungsten is used in drill bits for the oil industry and DIY tools, ballpoint pens and traditional light bulbs.
Managing director Russell Clark said Wolf could become a big player in tungsten mining.
The industry is characterised by small producers rather than industrial giants.
“There’s no big hairy gorilla in the middle of this,” he told Proactive Investors in an interview.
London and Australia-listed Wolf floated on the ASX in 2007 with the original aim of mining tungsten in New South Wales.
That approach failed and Clark’s predecessors started developing Hemerdon after deciding to switch focus to the UK.
Clark took over in 2013 and oversaw fund-raising for the scheme, including £99.2mln raised in March 2014.
The mine is estimated to have 35.7mln tonnes of reserves, which should provide at least 10 years of production.
It is expected to turn out one lorry-load of tungsten a day, which will be shipped or sent by road and rail to processors in the US and Austria.
Up to 500 people were needed to build the mine and it should employ about 200 when open.
Wolf has liaised closely with councils and the Environment Agency to win planning consent and avoid delays.
Clark said: "It is unusual for natural resource projects to come in on time and on budget."
World needs one Hemerdon a year
Wolf says at least one new mine similar to Hemerdon will be needed each year to meet tungsten demand growth, which has outstripped rises in global GDP in each of the last 10 years.
Hemerdon is expected to produce about 3.5% of forecast world demand next year.
China dominates the world’s tungsten reserves and production, although there are smaller producers in Canada, North America, Spain and Vietnam.
Cheap tungsten was expected to flood into the global market after the World Trade Organisation stopped Beijing imposing export quotas. The Chinese have moved to offset that with domestic production taxes.
But Chinese producers are having to work harder to find high quality reserves of the metal in deeper and older mines.
Tungsten prices have softened recently as the oil industry has reduced investment in drills and production equipment amid falling oil prices.
But Wolf is confident that shortages of the metal will keep longer-term demand and prices buoyant.
Most significant tungsten projects elsewhere are up to two years away from commercial production and some existing production is shutting down, it says.
Clark says the company’s current focus is to get Hemerdon running efficiently and to start paying shareholder dividends.
He hopes to invite a senior politician to officially open the plant in the autumn, although that has not yet been finalised.
There is more exploration potential around the site and Wolf is not ruling out developing other speciality metal mines.
“If we find the right opportunity somewhere else, we’ll certainly look at it,” Clark said.