Developments in the UK mining space

4 minute read
05 October 2016

The sad demise of the UK's King Coal, Richard Budge, earlier this year marked a particularly low point in the UK coal industry and followed the closure of Britain's last deep pit mine at Kellingly. However, the UK and Ireland have seen a pick up in the mining space over the past year with some key developments. Each development has resulted in a rise in employment in their respective parts of the country and improvements to infrastructure which would otherwise not have been possible.

South Crofty, the Cornish tin mine, was purchased by Strongbow Exploration, a Canadian company, in March this year. The acquisition is a further attempt to revive the mine which shut in the 1990s. The new owners have a mining permit until 2071 and a further 7,500 hectares of exploration upside in Cornwall. It is understood that Strongbow will focus on deeper-level mining at South Crofty, which it considers to be one of the best tin opportunities currently available.

Drakelands, the tungsten mine near Devon, has been in production since last year and is believed by its owners, Wolf Minerals, to have the potential to be the biggest tungsten mine in the Western world. Wolf Minerals is an ASX and AIM listed speciality metals producer. The tungsten mined at Drakelands is reported to be worth almost $30,000 per tonne and is expected to generate 3.5% of the global tungsten supply.

Sirius Minerals, the AIM traded fertilizer company, announced a detailed feasibility study for its proposed $3.7 billion polyhalite project in Whitby, North Yorkshire, in March 2016 (the total capital fundraising requirement was subsequently reduced to $2.91 billion in June 2016). According to the company, the mineral deposit could be mined for at least a century. Sirius intend to raise £1.1 billion in debt and equity to start the first phase of construction of the mine, which their Chief Executive, Chris Fraser, has said he hopes to have done by the end of this year. The Company has recently announced that its Development Consent Order for its proposed harbour facilities at Teeside have been approved.

Dalradian Resources' subsidiary, Dalradian Gold Limited, is focussing on its Curraghinalt gold project in Co. Tyrone, Northern Ireland. In its June 2016 release, Dalradian announced the Carraghinalt metallurgical test results including overall gold recovery of 94.3%. The test work results from its feasibility study metallurgical program demonstrated that gold recoveries over 94% are achievable with a simplified processing circuit. Final metallurgical results are pending and will be included in the feasibility study Dalradian expect to release later this year. 

Strategic Minerals, the multi-minerals production, exploration and development company, purchased a 9% stake in Redmoor, a tin and tungsten project in Cornwall, from New Age Exploration Limited (an ASX listed company), earlier this year. It has an option to increase its stake to 50%. Redmoor holds an exploration licence and option over 23km2 in the Cornish tin-tungsten-copper mining district. The exploration licence provides the rights to explore for a period of 15 years and the mining lease option provides the right for Redmoor to enter into a 25-year mining lease over any part of the licence area. 

These projects, and the continuing activity in the UK aggregates market, such as the acquisition by Breedon Aggregates of Hope Construction Materials Limited in August and the listing on the Official List of the London Stock Exchange of Ibstock plc (a manufacturer of clay bricks and concrete products), reflect a renewed interest the UK sector mining and minerals sector helped, of course, by an upturn in some commodity prices.

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