A surprise and "lucky" aggregates discovery at the Drakelands tungsten and tin mine at Hemerdon near Plymouth will have "a huge advantage over local competitors", claims operator Tungsten West.
We’ve posted about Drakelands before. Since the discovery of a tungsten-tin deposit in 1867, the site has had a chequered history. Wolf Minerals was the latest company to attempt to profit from the deposit, pouring £200 million into the site before calling in the administrators in 2018.
Last year, Drakelands was purchased by Tungsten West Ltd. Operations are due to restart in 2021.
Of course, it’s easy to stand next to a hole in the ground and make grandiose predictions of untold mineral wealth; mining companies do it all the time – particularly when looking to raise funds from hopeful investors. Once upon a time, it was claimed there were 20 million tonnes of sand and gravel at Straitgate; now Aggregate Industries is struggling to make the case for less than 5% of that.
Grand claims are now being made about Drakelands, particularly about the huge supply of aggregates discovered. If those claims prove true, Aggregate Industries, and its business across the South West, will suffer.
Tungsten West takes market edge with aggregates find #tungsten #aggregates https://t.co/dRW07frolw via @ExtIndustries— Extractive Industries (@ExtIndustries) September 11, 2020
Tungsten West has reassessed the Hemerdon site, and claims to have discovered hundreds of millions of tonnes of aggregates. The granite mined for the tungsten and tin "makes exceptionally high value aggregates." Classed as secondary aggregate – a by-product of working the metal deposits – this material would have "a huge advantage over local competitors" by avoiding the aggregates levy of £2 per tonne. Tungsten West’s executive chairman talks of a "fantastic opportunity" and claims:
The mine sits in an area of the UK which is desperately short of aggregates with very good prices.
We have the full suite, from 40 ml clean gravels all the way down to fine sands, which are produced naturally as part of the processing route.
Last month, according to Tungsten West, Devon County Council agreed to application PRE/4195/2020 to temporarily increase the amount of aggregates permitted to leave the site, from 150,000 tonnes to 1.4 million tonnes a year. Tungsten West hopes to make this permanent, and thereafter increase it further to 2 to 2.5 million tonnes a year, "once we’ve demonstrated we can sell that much aggregate into the local and wider markets."
Tungsten West hopes local markets could take "in the order of 0.5 million tonnes a year", and has apparently "signed letters of intent and are in the process of formalising full sales contracts for a number of large local housing projects where we would be the exclusive supplier of aggregates." The company claims the already-mined tailings from the Wolf Minerals operation contain 3 million tonnes of finely crushed granite which can be readily used for concrete and mortar.
In the longer term, Tungsten West is looking to sell 3.5 to 4 million tonnes of aggregates per year, which – with "at the gate prices of £12-14/tonne" – could produce "$50million of revenues." Drakelands is "less than a mile from rail", and, using Plymouth docks, aggregates could be shipped to London and Continental Europe. Tungsten West now expects 50% of revenue to come from tungsten, 5% to 10% from tin, and 40 to 50% from aggregates.
A new supply of levy-free aggregates of the magnitude described is bound to have an impact on the South West market, undoubtedly forcing current players to reassess the scale of their operations.
