A mining firm which is looking to revive production of the rare metal tungsten and tin in Devon is set to lose almost half of its staff following a cost cutting restructure.
Tungsten West is redeveloping the Hemerdon mine site near Plymouth, estimated to be the second-largest global reserve of tungsten, which is used in the production of light bulb filaments and cutting tools.
The AIM-listed company launched a review of operating costs, capital expenditure, and sale of surplus assets, amid “multiplying” energy, fuel and construction costs.
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In an update on Friday (June 2) the firm’s management told investors it expected a 42% reduction in headcount and monthly payroll costs via redundancy and resignations.
According to the group’s half year results published in December, it employed 61 staff, excluding directors, as of the end of September 2022. According to the report more than 90% of its employees live in Devon and Cornwall, with the average salary £53,000 - significantly above the average for the region.
Having previously put its plans for Hemerdon on hold, the company said it had been scaling up its workforce since last July as it restarted work at the site.
Tungsten West appointed experienced mining consultant Neil Gawthrope as chief executive in March, to help secure funding necessary to complete the project.
In April the company said it was aiming to secure between £5m and £6.95m through an interim fundraising round through a convertible loan note, and a further £2m via an open offer to existing shareholders. The company said it was targeting delivery of the scheme for eight to nine months after full project funding had been agreed.
Bosses added that once it raised enough cash, executive vice-chairman Mark Thompson would step down, to be replaced by “additional non-executive directors with complementary skills and experience”.
The company has been pressing ahead with the project and on Friday it also announced a partial restart of production at Hemeredon on the mine’s legacy tungsten and tin ore. The business said a little more than 50 tonnes of ore had been processed, generating more than £400,000 in revenue.
Mr Gawthorpe said: "This small-scale production of tungsten and tin is a mere indication of what can be achieved once the mine is fully re-opened. The success of the recommissioning of the dry section of the refinery has also provided us with valuable insight into the future operating parameters.
"We are dedicated to building and operating this mine with the support of all key stakeholders, especially our local communities, in order to create a responsible mining operation and sustainable source of tungsten and tin concentrate in South Devon."
Tungsten West bought the Hemerdon mine out of receivership for £2.8m in 2019 when former owner Wolf Minerals went into liquidation.
Last August, Tungsten West reported widened losses of £13m - up from a loss of £8m the previous financial year. The company reported a rise in revenue but administrative expenses increased by more than £4m to £7.9m.
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