Time to succeed in for the tin hats. Metropolis discuss is returning, because it does each few years, to the concept of reopening the tin mines that when made locals wealthy. South Crofty, first mined within the seventeenth century, is planning for a comeback, and hardly for the primary time. The tin miner, owned by Cornish Metals since 2016, has had a number of tried rebirths through the years.
Pshaw, say the tin bulls. Tin costs, like these of different commodities, are at an all-time excessive. Ian Hannam, aka “the King of Mining”, is again in on the rock face. The distinguished ex-JPMorgan banker is backing Tungsten West in neighbouring Devon. Along with Moneysupermarket cofounder Simon Nixon, he plans to have the Drakelands mine again up and working by subsequent yr.
Drakelands boasts tungsten, utilized in the whole lot from saws to golf golf equipment, alongside tin. Pandemic-shuttered tin mines crimped provide, whereas demand from electronics producers continues apace. Final yr’s provide hole of 5,200 tonnes has halved however a deficit stays. Tungsten costs, in the meantime, stay subdued, under the peaks of 2013 and 2018.
Heightened commerce rigidity with China, the world’s largest tungsten producer, would bode nicely for Drakelands, the fourth-largest tungsten deposit on the planet. Tungsten West is chasing a £100m valuation by means of a £20m preliminary public providing on Goal, tapping wealthy veins of retail traders.
However, like Crofty, there may be some horrid historical past to beat. Earlier proprietor Wolf Minerals presided over poor-quality ores and low utilisation charges that failed to satisfy contractual obligations. Traders within the shares, additionally listed on Goal, watched their worth monitor tungsten costs decrease in 2014 and 2015 till Wolf pulled the itemizing a number of years later. Wolf Minerals reportedly sank £200m into Drakelands earlier than calling time.
Undeterred, Tungsten West is relying on X-ray sorting know-how to provide higher-quality ores. That, it reckons, will assist it run an environment friendly and worthwhile operation. It might be elevating only a tenth of the cash Wolf sank in, however view that as a primary stab. This flotation will solely be for traders with deep pockets and a willingness to maintain digging into them.