Tungsten West (LSE:TUN) has signed an eight-year offtake agreement with U.S.-based Elmet Technologies covering 1,000 tonnes per year of contained tungsten trioxide (WO₃) from the Hemerdon mine in Devon.
The company said the agreement has an indicative nominal value of more than £1.4 billion based on current tungsten prices. As the contract uses variable pricing, the amount does not represent a fixed value for the agreement.
Under the arrangement, material from Hemerdon will enter tungsten processing and manufacturing supply chains in the U.S. and UK.
Agreement Covers 1,000 Tonnes of WO₃ Annually
Elmet Technologies has agreed to take 1,000 tonnes per year of contained WO₃ from Hemerdon over the eight-year term.
The agreement also provides for Elmet to use commercially reasonable endeavours to process an additional 500 tonnes annually to support UK government strategic requirements.
According to Tungsten West, this provision is intended to preserve processing capacity for potential UK demand.
Elmet has received U.S. defence-related funding, according to the information provided by Tungsten West.
National Wealth Fund Plans Investment of Up to £71 Million
The offtake agreement comes alongside a planned investment of up to £71 million in Tungsten West by the UK National Wealth Fund.
The National Wealth Fund also has an option covering up to half of Hemerdon’s output.
Tungsten West said these arrangements are intended to establish a supply chain connecting production at Hemerdon with tungsten processing and manufacturing in the UK and U.S.
Tungsten West Owns Hemerdon Mine in Devon
Tungsten West Plc is a UK-based mining company that owns the Hemerdon tungsten and tin mine in Devon.
Hemerdon contains tungsten and tin resources, with the company seeking to supply tungsten concentrates from the UK into industrial, defence and advanced manufacturing supply chains.
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