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Wolf Minerals’ (LON:WLFE) Hemerdon mine may soon be the largest tungsten producer outside of China and Russia, according to broker SP Angel.
Hemerdon only started production last month, but the current top Western producer, Cantung in Canada, is in the equivalent of administration and being wound down.
Cantung is victim of a slide in the price of tungsten that has seen the average price fall by US$154/mtu to US$206/Mtu since work commenced on Hemerdon in March 2014.
Wolf said today that this has resulted in some supply being withdrawn from the market with some producers shutting down and lower overall trading volumes than in previous years.
SP Angel suggested this referred to the closure of Cantung and when when this occurs, Hemerdon is likely to be the largest tungsten mine outside Russia and China.
Wolf added that new supply from projects outside of China is expected to be limited for the next few years, which may result in a tighter supply scenario.
The miner confirmed today that Hemerdon, near Plymouth in Devon, is running for seven days a week on a trial basis.
The emphasis in the current quarter will be to build up to full production and optimise the plant’s performance, through a shift to permanent seven day working if this is approved.
Russell Clark, Wolf's managing director, said: “The company has now realised its ambition of becoming a tungsten producer and we expect to provide a reliable, high quality supply of concentrate to our customers for many years into the future."
At full tilt, Hemerdon will produce more than 4,500 tonnes of WO3 (tungsten) in concentrate per year.
Shares edged up to 14.5p.