Q&A: Tungsten West plans Hemerdon mine restart for 2021

The Hemerdon tin-tungsten mine in the UK city of Plymouth is touted as one of the largest tungsten reserves in the western world. The mine faced a challenging past with its previous owner, Australian specialty metals miner Wolf Minerals, reopening in 2015 but being mothballed in 2018 after failing to reach expected recovery rates. Tungsten West bought the mine for just under £3mn ($3.7mn) in November 2019, and is further studying the ore body and processing techniques to create an economically viable supply chain.

In a phone interview, Argus asked Tungsten West chief executive Max Denning what the immediate future holds for the mine. Hemerdon is currently under care and maintenance, and because of this we've been slightly Covid-19 proof as the few employees at the site worked within social-distancing protocols.

We have completed initial test work and are now conducting a feasibility study, which is expected to be completed this year or by the first quarter of 2021. We expect to get financed off the back of the feasibility study, with a rebuild time of six months.

From the initial work, what have you discovered about the ores and processes? And what process changes are you planning? The historical data on the mine were not fit for purpose. The old processing plant did not account for certain nuances of the ore — most notably the friable nature of the mineral — and hence didn't have sufficient recovery rates in its three years of operations. Furthermore, the plant suffered from a lack of stability and surge capacity, which caused excessive downtime.

After six months of legal and technical due diligence and detailed investigation into the ores' characterisation, we found that the mineral was ferberite [the iron end member of iron-manganese wolframite] and not wolframite.

So, we devised a new processing route. First, we will implement X-ray transmission ore sorting, a pre-concentration technology that scans each individual rock for density and removes barren material. The ore body is in nugget form and contains coarse grain ferberite crystals, which makes it optimal for ore sorting. The additional ore sorting step will significantly reduce downstream processing costs, and feed into the concentrator plant, leading to a much cleaner and higher-grade ore.

We also plan to introduce wet-high intensity magnetic separation initially alongside the existing fines gravity circuit, as ferberite is para-magnetic. This means it concentrates via magnetic separation.

Upgrade works on the dense media separator [DMS] circuit was completed during Wolf's era and with a few further required modifications, the DMS will operate well as the main method of concentration for the coarse circuit.

How much will these changes to the plant and any additional steps cost? Wolf Minerals spent over £200mn on the Hemerdon mine. The initial modifications we are making will cost a fraction of what has already been spent. All in, the restart costs including rebuild, modifications and working capital are expected to be between £30mn and £40mn.

Prices for ammonium paratungstate [APT] and tungsten concentrates in Rotterdam are currently at eight-month lows and more than 40pc below 2018 levels. How does Tungsten West plan to navigate the low spot price landscape? Shortly after the Hemerdon project entered into receivership in August 2019, stocks held by the now-defunct Fanya Metal Exchange — which accounted for approximately one-third of APT consumption — hit the market, causing a sharp drop in prices. This project's reference price was of $340/mtu of tungsten trioxide (WO3) in late 2018. With the lack of transparency or volatility, around 30pc of production is uneconomical at the current spot price of $200/mtu.

But our operating expenses and cash costs are significantly below that level. We have one of the lowest production costs for medium-grade ore, so strategically, we are in a very strong position at the lower end of the cost curve.

In addition to being a low-cost producer, what value does the Hemerdon mine bring to the market? Tungsten concentrate buyers need security of supply. And outside China, concentrates are a rare commodity. China also has a concentrate export ban, and as there are few producers of tungsten concentrates in the rest of the world, there is a gap to fill.

We are in talks with a multitude of potential buyers on offtake agreements. We'll be one of the biggest producers of tungsten concentrate outside China at a time when there may be a certain level of increased scrutiny over supply chains.

Also, we're in discussions with local renewable power projects over powering the site with green energy. Great advances are being made in green mining equipment and this is something that we're looking to deploy in a few years.

By Anuradha Ramanathan

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