KEY POINTS
• Tungsten West will supply 1,000 t/y of tungsten trioxide.
• The eight-year deal has an indicative value of £1.4bn.
• Elmet can process an additional 500 t/y for UK strategic needs.
Aim-listed Tungsten West has signed a binding eight-year offtake agreement with US-based Elmet Technologies, creating a long-term route for tungsten from the Hemerdon mine in Devon, UK, into Western processing and manufacturing supply chains.
Under the agreement, Tungsten West will supply Elmet with 1,000 tonnes a year of contained tungsten trioxide from Hemerdon.
The agreement has an indicative nominal value of about £1.4 billion, based on prevailing tungsten prices and foreign exchange rates.
The deal gives Tungsten West a long-term commercial arrangement for its future tungsten production while connecting Hemerdon with a US-based producer serving advanced materials and strategic industrial markets.
The agreement also contains flexibility to support the UK government’s strategic tungsten requirements. At Tungsten West’s request, Elmet has agreed to use commercially reasonable efforts to process an additional 500 tonnes a year of contained tungsten trioxide.
That provision allows part of Hemerdon’s future production to potentially serve UK strategic requirements while maintaining the broader commercial relationship between the two companies.
The arrangement comes as governments in the UK and US seek to strengthen supply chains for critical minerals that are important to defence, aerospace, advanced manufacturing and other strategic industries.
Tungsten is considered an important industrial mineral because of its applications in areas including high-performance materials, machining and defence-related manufacturing.
Hemerdon positioned as strategic supply source
Tungsten West said the agreement establishes a significant long-term pathway for Hemerdon tungsten into both the US and UK processing and manufacturing ecosystems.
The company is positioning Hemerdon as a potential source of secure Western tungsten at a time when governments and manufacturers are seeking to reduce vulnerabilities in critical-mineral supply chains.
Tungsten West CEO Jeffery Court described the agreement as an important milestone in the company’s efforts to establish Hemerdon as a strategically significant tungsten source for Western markets.
UK Reindustrialisation Minister Blair McDougall said the agreement demonstrates cooperation between the UK and US in mining and mineral processing.
He said the partnership supports efforts to build more resilient and sustainable critical-mineral supply chains.
Elmet is developing a vertically integrated tungsten supply chain across the US and allied markets.
The company has secured a $450 million committed investment from the US Department of War and has separately entered into a contract worth up to $2 billion to supply tungsten materials to the US National Defense Stockpile.
Elmet has identified long-term mine offtake agreements as an important part of securing additional tungsten feedstock for its expanding processing operations and future stockpile deliveries. The Tungsten West agreement is therefore expected to form a key component of Elmet’s future tungsten concentrate supply strategy.
The latest offtake agreement follows increased UK government involvement in Tungsten West and the Hemerdon project.
In August, the National Wealth Fund announced an investment of up to £71 million in Tungsten West.
The investment also provides the UK government with a negotiation period covering a potential right to procure as much as 50% of Hemerdon’s tungsten production.
The additional 500 tonnes a year that could be processed under the Elmet agreement provides further flexibility around that potential UK requirement.
Tungsten West said the structure allows it to maintain its long-term relationship with Elmet while retaining options to support Britain’s strategic mineral needs.
Hemerdon is therefore becoming increasingly integrated into wider Western efforts to secure critical-mineral supply chains, with its future production potentially serving both commercial manufacturing markets and strategic government requirements.
