Firm close to £130m funding for reopening of Devon tungsten mine

The Australian company behind plans to reopen a tungsten mine on the outskirts of Plymouth has now lined up 97% of the funding it needs to make progress with the scheme, after securing an additional £50 million.

Wolf Minerals announced to the Australian Stock Exchange on Friday that it had secured $82 million (£50.8 million) through a loan and other types of funding.

The deal is contingent on the Western Australian firm raising a further £13 million in equity funding – which will take it past the £130 million threshold needed for Wolf to continue work on the mine at Hemerdon, near Sparkwell. The mine is recognised by the British Geological Survey as the fourth largest tungsten resource in the world, with feasibility studies confirming that mining at the site would be economically viable, and would also include tin reserves.

The funding announcement is a significant step forward for the plans, which were first unveiled in 2007 but have been delayed by the recession.

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Wolf Minerals has already invested £1.8 million in the construction of a link road between Lee Moor and West Park Hill, in Plympton, which was a condition of the original 1986 planning approval for mining at Hemerdon.

A timescale has yet to be decided for mining to start, with the firm focusing its efforts on getting the remainder of the funding package in place.

Part of the latest funding is likely to be used to buy properties near the mine which the company is required to purchase under the terms of the planning permission.

It also allows Wolf to continue in the design, engineering and procurement necessary to build the mine and bring it back into production.

Wolf managing director Humphrey Hale said: "We are delighted to secure this funding package to further progress the Hemerdon project.

"Our goal is to develop the project into a globally significant new source of tungsten, and we now look forward to moving forward with our mine development and construction plans."

Mr Hale said the business was in "advanced negotiations" with investors to secure equity funding.

When it's fully operational, 230 jobs will be created at the mine with the local economy likely to benefit further from supply chain contracts.

Wolf has recently opened a UK office at the Tamar Science Park, in Plymouth, and is seeking to recruit three senior managers.

In September, the firm received environmental approvals, with the granting of seven water permits from the Environment Agency, for the operation of the mine, including a waste dump licence in line with the EU Mine Waste Directive.

Hemerdon was closed in the 1940s following a slump in the price of tungsten.

But since 2005, when China's output of the mineral dropped as it focused on increasing its own GDP, the mineral's price has risen, prompting firms such as Wolf to revisit sites which were previously believed to be unviable.