The UK government is taking a direct financial and supply-chain role in the restart of Tungsten West’s Hemerdon tungsten-tin mine in Devon after the National Wealth Fund agreed to provide a funding package worth up to £71 million. The transaction is expected to complete the financing required to bring the previously developed mine back into production. It combines equity investment, debt financing and potential offtake arrangements, giving the government a direct interest in both the company and future tungsten supply.
Under the agreement, the National Wealth Fund will invest £36 million in equity at 36p per share and provide a committed £25 million debt facility. A further £10 million uncommitted accordion facility is also available. Following completion, the National Wealth Fund is expected to hold approximately 7.42% of Tungsten West and will have the right to nominate a non-executive director to the company’s board.
Government Negotiates Potential Tungsten Offtake
The financing also includes an exclusive negotiation period covering a potential agreement for the UK government to purchase as much as 50% of Hemerdon’s forecast tungsten production. This gives the transaction a supply-chain component alongside its financing role. The government would potentially become both an equity holder in the producer and a significant buyer of its future tungsten output.
Tungsten is used in cemented carbides, cutting tools, high-temperature applications, defence systems, aerospace components and precision manufacturing equipment. Global tungsten production and processing remain heavily concentrated in China, while Europe has limited primary mine supply. Against that supply structure, Hemerdon represents one of the relatively few Western projects positioned to return to production without having to progress through an entirely new exploration and permitting cycle.
Brownfield Mine Targets 2026 Production
Hemerdon is a previously developed brownfield operation with existing infrastructure. Tungsten West says the financing required for the restart is now effectively complete. Restart testing has already resulted in the production of concentrate. The company is targeting initial production in Q3 2026, followed by full-scale ramp-up in Q1 2027.
The project is expected to support approximately 350 direct jobs once operational. The production schedule places considerable importance on the performance of the restart programme. Hemerdon was previously operated as the Drakelands mine, where technical and financial difficulties affected the operation. Consequently, the current development involves more than simply reopening an existing mine. Tungsten West must demonstrate that changes to processing systems, mine planning and operational controls can resolve the problems associated with the earlier operation.
Processing Performance Remains Central to Restart
With financing now substantially secured, operational performance becomes a key focus of the project. The processing plant will need to achieve stable throughput, while tungsten and tin recoveries must meet expectations. Concentrate quality will also need to satisfy customers, and operating costs will have to remain at levels capable of supporting sustainable margins.
The government-backed financing addresses a major funding requirement, but it does not remove the technical challenges associated with returning the operation to commercial production. The potential offtake arrangement could provide an additional element of commercial certainty. If an agreement covering up to 50% of forecast tungsten production is ultimately concluded, a significant portion of Hemerdon’s output could have a direct connection to the UK’s strategic-material supply chain. For Tungsten West, such an arrangement could also provide a stable customer for a substantial share of its production.
Financing Structure Links Capital and Supply Security
The Hemerdon transaction combines three mechanisms that are generally considered separately: equity capital, debt financing and potential physical offtake. Equity provides long-term project capital, while the debt facility improves financing certainty. A potential offtake agreement could reduce product-marketing risk and provide greater visibility over future revenues. This structure is particularly relevant to strategic mineral projects, where financing can be difficult to secure because markets are smaller and less transparent than those for major exchange-traded metals. Tungsten production can also involve specialised processing requirements and customer relationships.
For projects considered important to supply security, public-sector participation can therefore address several financing and commercial requirements at the same time. The Hemerdon restart also reflects the challenges associated with projects that have already experienced operational difficulties. Tungsten West has spent years working to rebuild the project following the problems encountered during its previous operating period.
Hemerdon Positioned Within Western Tungsten Supply
The mine’s development comes as governments seek to reduce exposure to concentrated strategic-material supply chains. Many European critical-minerals projects remain at exploration, feasibility or permitting stages. Hemerdon differs because it is a previously developed asset with infrastructure already in place and a targeted production timeline extending into 2026 and 2027.
If Tungsten West meets its schedule, the project would be among the relatively small number of Western tungsten developments capable of contributing material supply during the current decade. The transaction also represents a more direct form of government involvement than traditional public support mechanisms such as grants, guarantees or research funding. The UK state is taking equity exposure, extending debt financing and negotiating rights connected to future commodity supply.
The approach could become relevant to other strategic-material projects where conventional private financing is difficult to secure. However, the commercial performance of individual operations remains fundamental, and public financing does not remove the requirement for mines and processing facilities to operate competitively. Hemerdon now has the funding structure required for its restart, with the UK government positioned as both a shareholder and potential major buyer. Initial production is targeted for Q3 2026, while full ramp-up is planned for Q1 2027.
