Tungsten West (AIM: TUN), the owner and operator of the Hemerdon tungsten and tin mine in Devon, UK announced Wednesday it has entered into a binding eight-year supply and offtake agreement with Elmet Technologies, a member of The Elmet Group, a US-based vertically integrated producer of tungsten products and advanced materials.
The offtake agreement is for 1,000 tonnes per annum of contained WO₃ from Hemerdon is valued at over £1.4 billion ($1.8 billion) at prevailing market commodity prices and foreign exchange rates.
The deal establishes a substantial long-term route for Hemerdon tungsten into US and UK tungsten processing and manufacturing supply chains and complements the UK Government’s strategic interest in Hemerdon following the National Wealth Fund’s investment of up to £71 million in Tungsten West and the exclusive negotiation to procure up to 50% of Hemerdon’s annual tungsten production, the company said.
The mine supplied crucial tungsten for military and defense efforts during both World War I and World War II. Mining continued on and off through the mid-20th century before shutting down in 1944.
“This announcement builds on our partnership with the United States, working together in areas like mining and processing, helping crucial sectors like defence and clean energy in both countries get the minerals they need,” Blair McDougall, Minister for Reindustrialisation for the United Kingdom, said in a news release.
“This is a landmark commercial agreement for Tungsten West and represents a major step in establishing Hemerdon as a strategically important source of tungsten for the Western world,” Tungsten West CEO Jeffery Court said.
“Hemerdon is uniquely positioned to provide substantial, long-term tungsten production from within the United Kingdom” Court said.
“With production now underway, the support of the UK Government through the National Wealth Fund and this long-term commercial agreement with Elmet, we are building a mine-to-market supply chain capable of supporting the critical mineral requirements of the UK, US and their allies.”
