Mining activity in Cornwall and Devon dates back to the Bronze Age but tin mining peaked in the mid-nineteenth century and died at the end of the 20th century.
A revival looks to be on the cards, however, after Sir Mick Davis, the former Conservative Party treasurer who was the driving force behind Xstrata PLC (now part of Glencore), agreed to pump £25mln into Cornish Metals Inc (AIM:CUSN, TSX-V:CUSN, OTC:SBWFF), which is looking to resume mining at the South Crofty tin project in Cornwall.
South Crofty in Camborne was Cornwall’s last working tin mine but it closed in 1998 due to plunging tin prices. Over the last year, however, the price of tin has risen to around US$44,000 a tonne from US$41,792 a year ago and around US$5,720 at the end of the last century.
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The price revival has clearly piqued the interest of Davis and his investment vehicle, Vision Blue Resources, which is providing the lion’s share of the £40.5mln Cornish Metals is looking to raise to reopen the South Crofty tin project. Vision Blue will receive a 25% stake in Cornish Metals in return for its £25mln investment.
Davis made his name building Xstrata into a major diversified mining and metals leviathan. Before that he was the chief financial officer (CFO) of Billiton PLC and the chair of Billiton Coal, joining Billiton after serving time as the CFO of Eskom, South Africa’s power generation company.
During his career in mining, he has raised more than US$40 billion from global capital markets and successfully completed over US$120 billion worth of corporate transactions, including the creation of the Ingwe Coal Corporation in South Africa; the listing of Billiton on the London Stock Exchange; the merger of BHP and Billiton; as well as numerous transactions at Xstrata culminating in the sale to Glencore PLC (LSE:GLEN).
The creation of Vision Blue suggests Davis is not interested in recreating past glories by building another mining behemoth; he is, in effect, outsourcing the legwork by investing in other companies, such as Canadian graphite mine developer NextSource Materials (where Davis is chair); vanadium mine developer Ferro-Alloy Resources Group; quartz project developer Sinova Global; and now Cornish Metals.
The focus of Vision Blue is on small to medium-sized high-quality, responsibly managed mining assets that will form part of the clean energy revolution. When he is interested in frying bigger fish, Davis’s investment vehicle has its partnership with The Energy & Minerals Group, the co-sponsor of the special purpose acquisition company (SPAC), ESM Acquisition Corporation.
ESM was formed a year ago and raised US$300mln but has yet to find a home for all of that money, which might be slightly worrying for those who have backed it as X2, a previous acquisition vehicle of Davis’s that raised an astounding US$5.5bn, failed to land the big deals it was seeking to do.
For Cornish Metals, however, and the Cornish mining industry, Davis’s interest is unalloyed good news.
The South Crofty tin mine produced for more than 400 years and it could be back in production in the second half of the current decade, as it already has the necessary permits – possibly written in an ancient and obscure Cornish dialect.
Work will include dewatering of the mine, resource drilling, completion of a feasibility study, evaluation of further downstream beneficiation opportunities, and on-site early works in advance of a potential construction decision.
Demand for tin is expected to increasingly outstrip supply in coming years driven by growing demand from the electronics sector, electric vehicles and renewable power, especially solar cells, Cornish Metals said.
"Tin is essential to anything electronic, including electric vehicle (EV) components, computing, 5G, robotics, renewable power generation, and the electrification of the economy, making South Crofty a strategic asset with the ability to provide a secure, traceable, sustainable supply of this important metal,” said Richard Williams, the chief executive officer of Cornish Metals.
"We are excited to embark on this new chapter of Cornwall's mining history which will see South Crofty make a significant contribution to the local and UK economy, with the potential to create up to 1,000 direct and indirect jobs, as well being at the forefront of the drive towards net zero,” he added.
As for “Mick the Miner”, he said the investment in South Crofty has the potential to deliver significant tin production to meet an expected supply shortfall and enable the deployment of new, green technologies.
“At the same time, restarting production at an historic underground mine, within the existing footprint, and with the benefit of modern production techniques, provides an opportunity to minimise environmental and other impacts whilst creating significant benefits for local communities," he added.