Tungsten West plc (AIM:TUN) announced on Tuesday that the UK Government will invest up to $97 million, equivalent to £71 million, to restart production at the historic Hemerdon tungsten and tin mine located in Devon. The investment, comprising both equity and debt financing from the National Wealth Fund (NWF), aims to bring the mine back to full production and establish a secure domestic source of tungsten, a critical mineral essential for high-technology supply chains, aerospace, energy, and defense applications. The Hemerdon mine supplied tungsten for military efforts during both World War I and World War II, with mining operations continuing intermittently until the facility's closure in 1944.
The mine represents a strategically important asset for the United Kingdom's domestic mineral supply chains. Following the investment announcement, Tungsten West and the NWF have entered into a shareholder relationship agreement that grants the NWF the right to nominate one non-executive director to the company's board. John Healey, Chancellor of the Exchequer, stated in a news release that the investment will supply vital minerals to British defense, energy, and aerospace businesses while preserving well-paid jobs across the UK.
He emphasized that the initiative aligns with the Government's broader commitment to drive economic growth and support British enterprises. The funding will enable Tungsten West to resume full production at Hemerdon, which is expected to create 350 direct jobs in the region. The company reported that tungsten and tin concentrate have already been produced at Hemerdon during the past month as final tests are being conducted to commence commercial production later in 2026.
Tungsten West is also in negotiations with a major downstream tungsten refiner to establish downstream processing relationships. Jeff Court, Chief Executive Officer of Tungsten West, described Hemerdon as a world-class, low-cost, and long-life tungsten and tin resource within the United Kingdom. He stated that with government support, critical minerals from Hemerdon will underpin the UK's national interests on a long-term basis.
According to Bloomberg News, Hemerdon had previously encountered significant challenges in restarting operations, including cost overruns, volatile commodity prices, and funding constraints that had hindered earlier restart attempts. Following the announcement of the government investment, Tungsten West's shares rose approximately 17 percent to 50.25 pence per share by 12:24 p.m. in London trading, bringing the company's valuation to approximately £627 million, or $855 million. The investment represents a significant strategic move by the UK Government to establish domestic production capacity for tungsten, reducing dependence on foreign sources for this critical mineral essential to modern defense and technology sectors.
Source: indexbox.io