More millions invested in mine
PLANS to open a rich tungsten mine on the outskirts of Plymouth have taken a step closer to reality.
Wolf Minerals Ltd, which will operate the mine at Hemerdon, has announced that it has secured an extra £3million investment from two major shareholders.
Wolf, an Australian mining company, needs to raise £110million to begin exploitation of what is the world's fourth largest deposit of tungsten.
The latest investment of Aus$5million brings the total to about £78million.
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Work is already under way on building a link road to the site, east of Plympton, and is expected to be finished next month.
Jeff Harrison, UK operations manager, said yesterday: "We are still in the fund-raising state. We are trying to get ourselves in a position where as soon as the money is raised we can start making things happen.
"We have gone out to tender for companies to construct the processing and earth-moving plant. Raising money takes time at the moment. We need all the money in place before we can begin to do anything on the ground."
In April Wolf signed a deal with two customers to sell most of its production. In return, the two companies agreed to lend Wolf £20million.
In March Wolf received credit approval for £55million from three major banks to push ahead with the project.
Although Hemerdon has one of the largest tungsten and tin deposits in the world it has been out of operation for most of the time since 1944.
Construction of a 600-metre link road between Lee Moor Road and West Park Hill in Plympton is a condition of the 1986 planning approval for mining at Hemerdon.
Plans for minor alterations and improvements to the existing planning permission for the road were approved by Devon County Council and Plymouth City Council planners in 2011.
Mining at Hemerdon will be opencast and would involve a pit measuring 800 metres by 500 metres by 200 metres, with waste material dumped north of the pit on Crownhill Down next to the Imerys china clay operations.
Wolf expects the mine to employ 150 to 200 people during construction, and 230 when it reaches full-scale production.
It is expected to generate returns of between £65 million and £74 million a year, with the company eyeing a profit margin of 20 per cent.
Tungsten is used in a range of applications from the car industry through to the aerospace sector.
The latest investment agreement, reported to the Australian Stock Exchange, was with shareholders Resource Capital Fund V and Traxys Projects LP.