Aim-listed Tungsten West has secured a binding eight-year offtake agreement with a US vertically integrated producer of tungsten products and advanced materials called Elmet Technologies.

Tungsten West will supply Elmet with 1 000 t/y of contained tungsten trioxide from the Hemerdon mine, in the UK.

The supply deal is valued at £1.4-billion (indicative nominal value) at prevailing market prices and foreign exchange rates.

At Tungsten West's request, Elmet has agreed to use commercially reasonable endeavours to process an additional 500 t/y of contained tungsten trioxide to support the UK government's strategic requirements.

The offtake agreement establishes a substantial long-term route for Hemerdon's tungsten into the US and UK tungsten processing and manufacturing supply chains, which positions Hemerdon as a vital source of secure, Western tungsten for defence, aerospace, advanced manufacturing and other strategic industries.

UK Reindustrialisation Minister Blair McDougall comments the announcement between Tungsten West and Elmet builds on the UK's partnership with the US to work together in areas such as mining and processing. "This is our critical minerals strategy in action, forging ambitious international partnerships that strengthen our economic security and help build more resilient, sustainable critical minerals supply chains."

Tungsten West CEO Jeffery Court adds that this landmark commercial agreement for the company represents a major step forward in establishing Hemerdon as a strategically important source of tungsten for the Western world.

AGREEMENT STRUCTURE

Elmet is building a vertically integrated US and allied tungsten supply chain, supported by a $450-million committed investment from the US Department of War, and has separately secured an up to $2-billion contract to supply tungsten materials to the US National Defense Stockpile.

Elmet has identified long-term mine offtakes as an integral part of securing the incremental tungsten feedstock required to support its expanded processing capacity and future stockpile deliveries. This agreement is a key cornerstone of tungsten concentrate supply to enable this strategy.

The offtake agreement has, however, been structured to preserve the ability for additional Hemerdon volumes to support the UK's strategic requirements.

In August, the National Wealth Fund announced an investment of up to £71-million in Tungsten West, which also provides the UK government with a negotiation period for the right to procure up to 50% of the Hemerdon mine's tungsten production.

The additional 500 t/y of contained tungsten trioxide option under the Elmet agreement provides further flexibility to support the UK's requirements while maintaining Tungsten West's long-term commercial relationship with Elmet.