(Western Morning News 10:30 - 02 November 2007)

£50 Million BOOST FOR TIN MINE

Multi-million pound plans to reopen a Cornish tin mine have taken a giant step forward.

Tin production at South Crofty - the county's last working tin mine - stopped in 1998. Today, it is being announced that a new mining company has been formed to start work at the site and that the £50 million needed to fund the project has been secured. Western United Mines is a newly formed company which will own and operate the South Crofty tin mine. Baseresult Holdings, which bought South Crofty in 2001, is the majority shareholder in the company. Bosses at South Crofty said the move would boost the economy of the Camborne, Pool, Redruth area of Cornwall which suffered when South Crofty closed.

The mine is expected to reopen within the next two years. More than £3.5 million will be spent by June 2008 on continuing the mine development. Tunnelling and exploration drilling activities begun by Baseresult earlier this year will continue.The further £50 million of investment required by the time the mine starts production, which is projected for the end of 2009, has been earmarked. Staffing levels have already increased from 17 to 26 and by July 2008, that figure is expected to have risen to 35 full-time employees.

Christopher Hall, an experienced mining finance and investment specialist, is the independent non-executive chairman of the Western United Mines board.

He said: "I am delighted to renew my association with South Crofty after some 20 years. The mine always suffered from a shortage of investment in exploration in the past. "The vision of Baseresult, the financial strength and market expertise of its new partner Galena, and the undeveloped potential of the South Crofty tin deposits look like a winning combination. "I look forward to helping to guide the project back into production for the benefit of the shareholders, the workforce and the Cornish economy."

The board's executive members are Kevin Williams, managing director of Mine Operations, Alan Shoesmith, acting chief executive officer and financial director, and David Stone, director of engineering. The executive members previously held similar positions on the board of Baseresult Holdings.

Mr Williams said: "When we bought South Crofty in 2001 we made our commitment to redeveloping it as a working tin mine very clear. Experience tells us that we should be able to resume full tin production and that there is potential for a mining life of 80 years."

From The Times December 5, 2007

Devon tin mine to reopen as prices soar

Christine Buckley, Industrial Editor

Until recently British tin mining was a bygone industry, with a trail of extinct mines exciting only the imagination of tourists in the West Country. Yesterday the industry received its second boost in less than a month when an Australian company announced plans to reopen a Devon mine after it had lain idle for more than 60 years.

The move by Wolf Minerals on Hemerdon mine follows the reopening of South Crofty in Cornwall, one of the world’s oldest mines with more than 400 years of production before it was closed in 1998. South Crofty’s reopening was an emotional moment for many after it had closed nine years ago as the country’s last remaining tin mine.

The boost for an industry that few expected to ever revive in the UK comes amid sustained record prices for metals.

Wolf Minerals hopes to create 500 jobs in the local economy by restarting the Hemerdon open-cast mine near Plymouth and plans to keep mining tin and tungsten for 20 years. It could have the prospect of going beyond that after agreeing a 40-year lease on the site. Wolf Minerals expects to produce about 3,000 tonnes of tungsten and tin a year.

Hemerdon is believed to be one of the world’s biggest reserves of tin and tungsten, both relatively scarce elements. Wolf is paying A$1 million (£425,000) for the rights to mine plus an annual rent of A$145,000. Wolf wants the mine to further its ambitions to become “a world class tungsten and tin producer”. Humphrey Hale, managing director, said: “The world market in tungsten and tin is incredibly strong. Both metals command high prices. We’ve searched the globe and Hemerdon is a world-class mineral deposit.”

A spokesman added: “The strategically important reserves of this valuable mineral are anticipated to meet the UK’s entire demand for this essential raw material for many years to come as well as generating economically important exports and up to 500 jobs.” The company has forecast that the local economy could benefit by up to £20 million over the next 10 to 15 years.

Hemerdon was first identified as a source of tungsten in 1867. Tin ore was found in 1916. The open mine was worked during both world wars but has not been operated since 1944. Its road to yesterday’s recovery actually began in the early

1980s when Amax, the US mining group, conducted a feasibility study and estimated it contained a recoverable 40 million tonnes of tungsten trioxide and tin. Planning permission for a widening of the mine and its reopening was granted in 1986. The Australian company plans to create 200 direct jobs at the mine and expects 300 more to be generated in the local economy around the mine. China and India’s growing economies are driving much of the increase in the price of tin and other metals, which is now helping to revive one of the oldest British industries. China is the world’s biggest tin producer, followed by Indonesia. Mining is not expected to resume at Hemerdon for three years. In the meantime, Wolf Minerals has pledged to consult the local community as it draws up its plans. The company has said that it will revise the planning permission that already exist to ensure they meet high environmental standards and modern mining practices.

But the prospect of new life for Hemerdon isn’t all good news for the residents. Julian Taylor, a parish councillor, told the BBC: “It will be a huge impact on Hemerdon. I feel really sorry for those people at the top end of the village where this mine will actually engulf their homes. There will be an impact on traffic. Our lives will change forever because the beautiful top part of the village will be cut off from the main part here.”

$25,000 a tonne not out of the question

Forget the cheap connotations of the word tin – the metal’s value is soaring. Yesterday it stood at $16,112 a tonne, an increase of 153 per cent over the past two years and 50 per cent up on last year. As with other metals, global demand is exceeding supply as sustained demand from China and India create a super cycle for the materials. In the case of tin, the supply shortfall has been exacerbated by a crackdown by the Indonesian Government on nearly 40 smelters, which it says were not conforming to standards. One trader on the London Metals Exchange predicted that the price of tin would exceed $25,000 a tonne. He said: “The whole story on tin is ultimately set around uncertainty about supply.” Tin may not be the metal of choice for the food industry anymore, having been usurped by aluminium, but it is still widely used for tinplating food cans, which are commonly made from other materials. As the metal bonds easily to iron and can be used with lead and zinc, tin is also often used as a coating to prevent corrosion. It is also used for soldering in the electronic industry. On a bigger scale it is used in automotive parts and in construction.