The company announced on Monday that had authorized EPC contractor, GR Engineering Services Limited (ASX:GNG) (GRES), to start construction at Hemerdon in southwest England. This latest news is yet another milestone for the company since December and sets the project on a more definitive timeline towards commissioning and first production.
The UK’s next mine
Hemerdon, said to be the third largest tungsten deposit currently in existence, will also be the first mine the United Kingdom will have seen in 45 years.
Russell Clark, Managing Director of Wolf Minerals says he has witnessed his share of surprise from the broader investment community relating when it comes to Hemerdon.
“They didn’t believe you could build a project in England,” Clark explained from New York, ”they didn’t think that you could get it permitted, and they didn’t think that we would get project financing,” Clark mused, “But all of those things are in place. And this will be the next tungsten mine coming on-stream in the middle of next year. ”
For Wolf, being the first mine in nearly 50 years is a significant milestone as it seems to bring with it the resurgence of mining in the nation. As Clark explained, mining in the UK “just fizzled out over the years,” but Hemerdon has sparked some excitement, particularly with the local community.
“It’s exciting and in the local community, for example, we have excellent support. And again the perception is that we had people at the gates with pickets and what have you but nothing of the sort. Very supportive, it’s in an area that needs jobs. We’ll provide 200 direct jobs and as I said, very supportive community living around us. ” Clark said.
Clark expects that when in production, Hemerdon will produce around 3,500 tons of tungsten, however, there is the possible to increase production to somewhere in the area of 4,500 to 5,000 tons.
Clark explained that currently, Hemerdon has the potential 10-year mine life, however, it has great potential to extend to about 14.
Tungsten demand and Hemerdon
When it comes to timing, Hemerdon looks to be on track to meet global demand. As Clark explained, tungsten demand is largely driven by global growth and currently, demand stands around 100,000 tons.
“The forecast,” he explained “is that demand will grow by about four to five percent a year, or four to five thousand tons a year.”
Furthermore, tungsten is expected to be in a deficit in 2016, which could boost the price in the coming years, just about in time for Hemerdon to come online.
Securities Disclosure: I, Vivien Diniz, hold no investment interest in any of the companies mentioned.
Editorial Disclosure: Wolf Minerals is an advertising client of the Investing News Network. This article was not written as part of the company’s advertising campaign. This is not paid-for content.