A long-term supply pact with US firm Elmet Technologies underpins the ramp-up of Britain's only tungsten mine.
Tungsten West (AIM: TUN) rose 6.18% to 47.25p after the company behind the Hemerdon mine in Devon signed an eight-year supply and offtake agreement with US-based Elmet Technologies, locking in a buyer for the bulk of its planned output as production is ramped up at the site.
The deal covers 1,000 tonnes of tungsten annually, currently valued at around £1.4bn, and gives Elmet a long-term source of material to feed its domestic supply chain. The agreement also leaves scope for Elmet to process additional tonnes on behalf of the UK government and other industrial customers, adding a further layer of potential demand beyond the core contract.
Hemerdon is regarded as one of the largest tungsten deposits outside China, and securing a committed, multi-year offtake partner is seen as a key step in de-risking the mine's restart. Investors have long focused on Tungsten West's ability to translate resource potential into contracted, bankable revenue, and this agreement goes some way to addressing that.
The tie-up with Elmet also plays into wider Western efforts to build tungsten supply chains independent of China, which dominates global production of the metal used in cutting tools, defence applications and electronics. That strategic backdrop has kept small-cap critical minerals names, including Tungsten West, in demand with investors positioning for supply chain diversification.
Attention now turns to the pace at which Hemerdon production is scaled up to meet the volumes committed under the agreement, and to further clarity on any additional government or industrial tonnage that could be processed through Elmet. Confirmation of ramp-up milestones and progress against the 1,000-tonne annual target will be the next markers for the shares.
This report is based on Tungsten West’s announcement and coverage by UK Investor Magazine. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Dominik Vanyi on Unsplash.
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