A high-worth Channel Islands-registered investment company which specialises in minerals is bankrolling plans to reopen Britain’s largest tungsten and tin mine, it has emerged.
Guernsey-headquartered Baker Steel Resources Trust is the largest share-holder in , on the fringe of Plymouth, for £2.8million in cash.
Baker Steel Resources Trust, part of a group of Baker Steel investment businesses, specialises in mining and minerals and has a global portfolio, mainly in equities, of 15 predominately unlisted natural resources companies.
In November 2019 it announced it was on a five-year share value high having found success with investment in the Prognoz silver mine in Russia, where it sold its stake for US$72million, an Australian coal business and Canada’s Azarga Metals Corp, which is digging for copper and silver in Russia.
It also has interests in two coking coal developments in Australia, a potash reserve in the Republic of Congo, a Zimbabwean gold mine and a cement works in Morocco.
Now it is involved with tungsten too, bankrolling the newly-formed Tungsten West firm in its bid to reopen the Drakelands mine, at Hemerdon, near Plympton, which shut in late 2018 after operator Wolf Minerals Ltd ceased trading, having lost £100million in just three years.
A firm called Drakelands Restoration Ltd, part of the North East’s Hargreaves Services Plc, took over the vast site, the third largest reserve in the world, in 2019 after its parent lost £8million in the doomed Wolf Minerals venture.
Tungsten West has now bought the land and the infrastructure and is carrying out a feasibility study into restarting production.
Tungsten West director Mark Thompson, an expert in metals and mining, said: “We are undertaking studies into the commercial feasibility of reopening the mine.”
He said conversations have begun with “stakeholders” including people living near the open cast mine, various councils, the Environment Agency and “former employees”.
When the mine shut about 200 people lost their jobs and Mr Thompson said the aim is to re-employ as many as possible.
Some have even begun working at the mine again and he said: “We would eventually expect a similar number of jobs to what Wolf had, about 200 jobs.
“We have already re-employed some people that were employed by Wolf. They will assist with the feasibility study we are undertaking.”
Mr Thompson is a highly experienced trader, investor and entrepreneur in the natural resources sector, and has founded several companies in addition to working for major trading, hedge fund and private equity groups.
He was portfolio manager and chief investment officer at a large metals focussed hedge fund, a partner at one of the world’s largest private equity houses, and founded several mineral exploration companies.
He lives in London but said: “I will spend half my time in Devon over the next 12 months.”
As part of Tungsten West’s take over at the site, which was expected to produce 3.5% of the world’s tungsten needs, Hargreaves Services is also to continue work and has signed a 10-year mining services contract, worth £1million a year for eight years starting by 2021, to safeguard and maintain the site.
Australia’s Wolf Minerals hit the skids when it failed to produce enough metal, saw global prices tank and was saddled with enormous debts.
Production only began in 2015 but there were fears the Drakelands mine could close as early as 2016, and so when Wolf finally went into administration on October 10, 2018, with a debt mountain of about £70million, it seemed like the inevitable conclusion to a doomed venture.
Wolf Minerals wound up having to tell the London Stock Exchange it was no longer in a position to meet its short term working capital requirements and ceased trading immediately, sending home more than 200 workers.
