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The government’s National Wealth Fund is set to pump £71m into miner Tungsten West in a bid to help reopen the Hemerdon mine in Devon.
The funding package combines a £36m share purchase, which will hand the government a 7.4 per cent stake in Tungsten and a seat on the board of directors, and a £25m loan facility.
The project is expected to boost the local economy in the South West of England through the creation of 350 direct jobs.
In addition to financial backing, the government will gain the option to buy up to half of the mine’s future tungsten output.
John Healey, the Chancellor, said: “This investment will supply vital minerals to British defence, energy and aerospace businesses – and keep good, well-paid jobs in the UK.”
Tungsten West, which is headquartered in Plympton in Devon, specialises in the mining and extraction of tungsten, tin and secondary aggregates – which are the by-products of other industrial processes.
“It is extremely important to us that we prioritise UK requirements for this critical metal to support domestic demand, including strategic initiatives across defence and next-generation energy,” Jeff Court, chief executive of Tungsten West, said.
The Hemerdon Mine, which previously operated as Drakelands Mine, was closed in October 2018 after its previous operator, Australian firm Wolf Minerals, went into liquidation. Tungsten West acquired the site in 2019 and subsequently spent years completely redesigning the processing layout and securing new environmental permits.
The fresh capital is set to help the firm rebuild and upgrade processing equipment on-site, cover day-to-day project costs, and fund labor and operations needed to reach full metal production.
The London-listed firm said the UK government’s shares would be formally listed on the stock market on 27 August, with mining operations restarting in the third quarter.
It marks the latest utilisation of the National Wealth Fund to advance the government’s agenda in key markets, including defence and energy.
During Rachel Reeves’ stint as Chancellor, the policy bank revealed a £599m financing package for Rolls-Royce Small Modular Reactors (SMR) in a bid to kick-start delivery on its project with Great British Energy.
The capital injection from the taxpayer-backed wealth fund is designed to de-risk the project for private lenders, through effectively using public money to “crowd in” billions in additional investment from the City and international markets.
Around a thousand jobs are tipped to be created at Rolls-Royce SMR, which is co-owned by the FTSE 100 giant and Czech power company CEZ, through the funding.
CityAM.com is the online presence of City A.M., London's first free daily business newspaper. Both platforms cover financial and business news as well as sport and…
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