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It has required moving wildlife, building “bat hotels” and planting 40,000 replacement trees. But after more than a year of construction, Britain’s first metals mine for more than four decades is nearing completion.

On the edge of Dartmoor, in Devon, cranes loom over the steel skeleton of a shed as long as a football pitch and 25m high.

Tungsten is one of the hardest of elements, seven times heavier than water and used in toolmaking and armaments. The Devon deposit was mined during the first and second world wars, but before Wolf spotted the opportunity to acquire the mining licence, the last serious exploration took place in the 1980s, before China’s explosive industrial growth.

The process plant, the nearby tailings dam for waste rock and the big open pit itself are the essential “kit” of a modern metal mine. They are familiar from Australia to Zambia but not in the UK, where such mining has been all but extinct in recent decades. The closure of almost all Britain’s collieries after a bitter 1980s strike further loosened the country’s bond with mining, and while London remains a centre for global mining finance, the projects are usually thousands of miles away.

Most tungsten deposits are in China but the country is now importing the metal to preserve its reserves. The Devon mine — named Drakelands — will generate about 3.5 per cent of global supply.

Russell Clark, Wolf’s managing director, says the project has “the potential to be the biggest tungsten mine in the western world.”

In building its mine Wolf is confronting some of the problems the UK often presents for intrusive infrastructure projects, including planning constraints. It employs more environmental staff than geologists.

Whereas the prospect of fracking has inflamed some UK communities where drillers want to operate, Wolf has been helped by a big local tradition of mining in this region, including ancient tin workings and nearby china clay works. The local pub is the Miners’ Arms.

“I have never seen this level of support for a project so close to a big centre of population,” says Mr Clark.

$30,000 Approximate value per tonne for the tungsten that Wolf Minerals will extract in Devon

Indeed operating in densely populated Britain has advantages. “If this mine were in [a remote part of] Australia it would struggle,” says Mr Clark “You would have to pay higher wages, you would need to build an airport, a power plant, an electric grid . . . it would all be much more expensive.”

Jobs are a big part of local support. The mine is recruiting 40 operating staff and has had 900 applications.

Wolf is, however, having to defy gloom over demand for commodities, which has hit the values of miners and energy companies. The global tungsten price is lower than in Wolf’s base case planning, although the company expects to increase the project’s value by getting more ore out of the pit over its life, and operating a seven-day week.

Wolf has invested £123m in building the mine. It says its “all-in” costs, including servicing debt, are about $170 per “metric tonne unit” — a pricing measure used in the tungsten market, equal to 10kg. The spot tungsten price is about $290/mtu and Wolf, which will sell most of its output to two regular customers in the US and Europe via so-called offtake agreements, is expected to receive about 80 per cent of that spot price.

If this mine were in Australia it would struggle. You would have to pay higher wages, you would need to build an airport, a power plant, an electric grid- Russell Clark, managing director, Wolf Minerals

“The company’s numbers suggest it has a strong enough margin to weather the prices we are seeing today. The mine should still generate cash,” says Michael Stoner, an analyst at Peel Hunt.

Wolf thinks prices will rise, anticipating that growth in tungsten demand usually exceeds global growth by up to 2 percentage points. That would mean a new mine the size of Drakelands being required annually.

One smaller European project is from Ormonde Mining, an Aim-listed miner that is trying to build a Spanish tungsten mine called Barruecopardo. Ormonde last month revealed a preliminary deal to bring in Oaktree Capital to provide debt and equity for the project. It has since received an approach from Almonty, a Canadian listed group.

Mr Stoner says: “It is a tough market at the moment for miners to fund development projects and so Wolf should have a big head start on any other projects. It doesn’t look like there are other projects that are going to get into production in the short term so Wolf seems to be getting into the market at the right time.”

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