Forbes article on WLF

An Old British Mine Gets Ready To Tackle Chinese Dominance Of A Critical Metal


5/04/2015

History is rubbing shoulders with technology in one of the world’s more remarkable mine revival stories which is within weeks of reaching a climax, as Britain prepares to welcome its first new metal-producing mine in more than 50 years.

Hemerdon, in the south-west county of Devon, had briefly been a big name in the armaments industry as a source of the tungsten used to harden steel used in artillery during both the first and second world wars.

Between those events, the mine, which can trace its roots back to 1867 as a source of tin, was mothballed, waiting for the next war, or for a time when the world was short of tungsten, an element also used to harden the steel in tools and as a filament in incandescent light-bulbs.

What’s driving interest in tungsten today is not the prospect of war, though that’s always an issue, it’s the overwhelming control of production by a single country; China.

Tungsten Sits Equal Highest On A Critical Element Risk List

Like rare earths, a family of elements with special military uses, tungsten sits high on a “risk list” compiled by the British Geological Survey because of their high economic value, relative shortage and potential for one country to throttle supplies. But, unlike rare earths, which have attracted political interest in the U.S. and other western countries, tungsten has escaped the limelight despite ranking equal first with rare earths on the risk list, sharing a score of 9.5 out of 10.

The primary features of tungsten include the fact that it doesn’t corrode, is extremely hard and has the highest melting point of any metal at 6,200 degree Fahrenheit, or 3,420 degree Celsius). There are no substitutes for it in some applications, and China controls the market.

71 Years In Mothballs

Hemerdon, which is located close to the port city of Plymouth, produced its last tungsten in 1944, with a flow of overseas metal displacing that mined in Devon. Attempts since the mines closure 71 years ago to re-start production failed because of low tungsten prices and local opposition to mining.

Big companies that tried to re-develop Hemerdon included Amax from the U.S. and Billiton, when it was a division of the oil giant, Royal Dutch Shell and before it merged with BHP. The new owner of Hemerdon is a small Australian-based mining company, Wolf Minerals, which takes its name from one of the major ores of tungsten, Wolframite.

Sales To The U.S. And Germany

Wolf’s plan is to produce around 3,450 tones of tungsten a year, along with an associated 460 tons of tin. Most of the output has been pre-sold to an Austrian company with U.S. operations, Global Tungsten & Powders, and a German company, Wolfram Bergbau und Hutten.

The sales deals effectively underwrite the success of Hemerdon in a way that eluded previous owners of the project.
At Hemerdon, construction work is being finalized ahead of the introduction of ore into the processing plant in July, and the production of finished products a few months later. Wolf’s management is confident that it has found a way to turn Hemerdon into a profitable mine that will not need a war to drive demand for tungsten-tipped armaments.

Prediction Of Higher Prices Ahead

The company’s managing director, Russell Clark, is predicting a rise in the price of tungsten (which is generally traded as ammonium paratungstate), from its current range of $260-to-$300 a ton to more than $450 a ton, thanks to tight supplies and few new tungsten mines anywhere in the world. With demand for tungsten rising at between 4% and 5.5% a year, Clark estimates the market needs a new mine the size of Hemerdon every year.

Investor interest in Wolf and its historic mine has been growing, with the company’s share price rising by 45% on the Australian stock exchange since the start of the year. Proving that the mine and processing plant can perform as promised, and that tungsten can once again flow from Hemerdon after a 71 year break, is the challenge for Wolf over the next few months.



http://www.forbes.com/sites/timtrea...tackle-chinese-dominance-of-a-critical-metal/