Tungsten West signs £1.4B offtake from UK

Tungsten West (LSE-A: TUN) has signed a binding eight-year deal to supply U.S. tungsten producer The Elmet Group (Nasdaq: ELMT) from its Hemerdon mine in southwest England, an agreement the miner values at more than £1.4 billion (C$2.6 billion) at current prices.

The offtake agreement covers 1,000 tonnes, or 100,000 metric tonne units (mtu), of contained tungsten trioxide (WO₃) a year. Pricing will vary with European ammonium paratungstate (APT) prices, meaning the £1.4-billion figure is indicative rather than guaranteed revenue. Elmet also agreed to try to process up to another 500 tonnes of WO₃ annually at Tungsten West’s request to meet U.K. government and industry needs.

“This is a landmark commercial agreement for Tungsten West and represents a major step in establishing Hemerdon as a strategically important source of tungsten for the Western world,” CEO Jeffery Court said Wednesday in a release.

The deal ties Hemerdon more closely into U.S. and U.K. supply chains as Western governments seek alternatives to China, which accounted for an estimated 82% of global mined tungsten production in 2024. Beijing imposed export controls on selected tungsten products in February 2025, helping send tungsten prices sharply higher that year.

Fund invests

The agreement follows the U.K. National Wealth Fund’s investment of up to £71 million in Tungsten West last month. The financing includes £36 million in equity and as much as £35 million in loans and gives the government an exclusive negotiating period for the right to buy up to half of Hemerdon’s planned annual tungsten production.

Elmet, meanwhile, received a US$450-million (C$637-million) committed investment from the U.S. government this month to expand tungsten mining, processing and manufacturing capacity. The company has also secured an agreement worth up to US$2 billion to supply tungsten materials to the U.S. National Defense Stockpile.

Tungsten West’s 2025 development plan forecasts average steady-state production of 332,000 mtu of WO₃ annually during years two through 11, along with 462 tonnes of tin. Full-scale commissioning is targeted for the first quarter of 2027, with steady-state production expected in the second half of the year.

Historical mine

Hemerdon has a long and uneven operating history. Tungsten was discovered there in 1867 and the site produced during the First World War and again between 1930 and 1944. Wolf Minerals restarted the mine in 2015 but halted production in 2018 after entering administration. Tungsten West acquired the operation the following year.

“With production now underway, the support of the UK Government through the National Wealth Fund and this long-term commercial agreement with Elmet, we are building a mine-to-market supply chain capable of supporting the critical mineral requirements of the UK, U.S. and their allies,” Court said.

Tungsten West shares gained 4.9% in London on Wednesday and were little changed Thursday at about 46.7 pence, valuing the company at roughly £703 million.