* Wolf Minerals to begin tungsten, tin production in 2015
* Antimony, tellurium deposits exist across Britain
* Strategic metal prices seen rising on growing tech demand
By Harpreet Bhal
LONDON, April 2 Mining firms are looking
favourably at Britain as a project destination with deposits of
strategic metals leading a small mining revival following the
launch of the country's first new metal mine in 45 years.
The UK has deposits of metals such as tin - used in mobile
phones, and tungsten - used to make drilling tools - as well as
antimony and tellurium - used in the semiconductor industry -
seen as having bullish long-term price outlooks as the appetite
for electronic gadgets expands in the developing world.
The southwest counties of Cornwall and Devon experienced
extensive mining in the 19th century when metals including
copper, lead and tin were keenly sought, but fierce competition
from lower cost operations in Latin America, Asia and Africa
resulted in projects being shut and many sites abandoned.
While analysts said it is unlikely for Britain to experience
another mining boom, the country is being eyed by some as a
favourable destination due to competitive labour costs and tax
rates, as well as deposits of strategic metals - a vital
component in technology and industry.
Australia's Wolf Minerals said in March it will
begin production of tin and tungsten by next year at its
Hemerdon mine in Devon, the world's third-largest tungsten
A second potential tin project, by Treliver Minerals is
currently in an exploration phase in Cornwall.
"The Wolf Minerals investment has catalysed other people to
come and look for deposits in the UK," said Andrew Bloodworth,
science director for minerals and waste at the British
Geological Survey (BGS).
"If an Australian company can come in and put together a
project and get all the permissions, that sends a hugely
important signal to other people to say you can do this."
Britain has small gold and silver mines in Scotland and
Northern Ireland, and has deposits of strategic metals antimony
and tellurium, although exact quantities are unknown.
Bloodworth said an ongoing geophysical survey by the BGS to
map soils and rocks in the country's southwest has received
interest from the mining community, as the industry seeks out
alternative supplies for strategic metals.
"Concerns about the supply of some 'critical' or 'strategic'
metals has also driven investor interest. The concentration of
about 80 percent of global tungsten production in China has
driven people to look for deposits elsewhere," he said.
The Hemerdon project aims to produce 3,450 tonnes of
tungsten a year, compared to a 80,000-tonne global market, and
500 tonnes of tin.
Prices for ammonium paratungstate, produced from tungsten
ore, have risen more than four fold in the last 10 years and
posted a 22 percent rise last year. APT-CHINA
"For 2014, the market is forecast to move into deficit as
demand grows at 5 percent and supply struggles to match it,"
Numis analysts said in a note.
In an environment where appetite for mining project funding
remains limited and is seen as risky, firms mining strategic
metals could find that the metals' long-term upbeat prospects
works to their advantage.
Also favouring the industry in Britain are lower labour
costs and corporate taxes compared to places such as Australia.
Although still costlier than Latin America and Africa, Britain
could provide room for smaller, niche firms to establish
high-value production, industry members said.
"On the back of what we have done, there are some companies
that are thinking that this is a part of the world that they
wrote-off previously but perhaps they shouldn't have," said
Russell Clark, managing director of Wolf Minerals
Still, companies say they face time-consuming and mining
rights procedures, and strict environmental controls.
"It is very difficult to get over the mineral rights issue.
A lot of companies look down here but they don't know how to go
about putting together packages for exploration," said Mark
Thompson, executive chairman at Treliver.
Mineral deposits, with the exception of gold, silver and
coal, do not always belong to the party that owns the land, and
often it is an aristocratic family or the Church of England that
retains the rights to the minerals and royalties.
(Editing by David Evans)