Buildings and winding gear at the South Crofty tin mine near Redruth in Cornwall. Photo / Graham Barclay
Buildings and winding gear at the South Crofty tin mine near Redruth in Cornwall. Photo / Graham Barclay
A half mile shaft of filthy water dug into the granite that forms the southernmost tip of England separates Richard Williams from his dream of bringing back mining to a region known for its tin since before Roman times.
It's just one hurdle for the head of Canadian upstart Strongbow Exploration.
The South Crofty mine bought by Strongbow last week was closed in 1998, bringing to an end a period of mining tin in Cornwall that dates from the Bronze Age and is hinted at in the ancient Greek writings of Herodotus.
Repeated efforts by investors to revive the operation since 2001 have failed.
The site was last handed to insolvency administrators three years ago as another proposal ran into planning and environmental setbacks and a weakening outlook for prices.
Williams, 49, is convinced South Crofty can be profitable, especially with a lack of new supply elsewhere in the world.
Strongbow estimates indicated resources of at least 30,000 metric tons, and sees the potential for another 50 to 60 years of mine life. Tin content in the ore of 1.8 per cent compares with the global average of less than 1 per cent estimated by producer lobby ITRI.
"Having seen the demise of the coal industry and the tin industry as I grew up, the opportunity to get South Crofty back into production was a fascinating one," said the chief executive officer of Strongbow, whose family worked the coal pits of Wales on the other side of the Bristol Channel.
"It's going to have a significant impact on Cornwall."
Only four greenfield tin deposits have been found since the collapse of an industry cartel in 1985-86, according to ITRI. That's even after demand surged for the metal used in soldering electronics from makers of computers, smartphones and televisions, pushing prices to a peak of $33,600 a ton by 2011.
Cornwall is indelibly linked with mining.
"Very few large tin-mine projects are making much progress at current tin prices, with no significant startups likely until late 2018 or further into the future," said Peter Kettle, a markets manager at ITRI. Macquarie Group sees demand exceeding supply until at least 2021 as output shrinks next year.
Even with prices down almost half from their peak after demand slowed, tin is still about three times more expensive than when South Crofty closed in 1998.
Societe Generale expects tin to average $19,000 a ton next year, from $17,805 now.
Williams is also counting on support from the Cornish government and people.
Abandoned Tin Mines overlooking the sea at Botallack, Penwith on the north coast of Cornwall. Photo / iStock
The rugged coastal area still dotted with stone chimneys that drove its steam-driven mining equipment during the 19th century is among the UK's poorest regions and, for now at least, one of the nation's largest recipients of European Union subsidies.
"It would be a very significant employer in Cornwall if we get going," Williams said.
There's much to do before then. Strongbow needs approval to treat a million gallons of contaminated flood water at a local sewage plant before pumping it into the sea. That will mean draining as much as 25,000 cubic meters, or 10 Olympic swimming pools, every day for 18 months.
Having seen the demise of the coal industry and the tin industry as I grew up, the opportunity to get South Crofty back into production was a fascinating one.
It will also need to avoid the pitfalls of its predecessors. Some of them also prepared to pump out flooded shafts before facing opposition from developers seeking to turn parts of the site over to housing and other projects, or falling foul of market downturns.
In 2013, a conditional underground mining permit valid to 2071 was granted by Cornwall Council. But then commodity prices began to slump and investors fled the mining industry, forcing the project into administration.
With the recovery in raw materials markets this year, Strongbow completed its acquisition of the mine from administrators in a deal with creditor Galena Metals Fund, the hedge fund arm of trader Trafigura Pte.
Strongbow could have the mine in production by 2019 or 2020, delivering 20 tons of tin a day, according to Williams. That would be worth about $357,000 at current prices. It would also mark something of a revival for a region rich in mining history.
"Cornwall is indelibly linked with mining," said Jeremy Wrathall, head of global natural resources at Investec, who studied at Cornwall's Camborne School of Mines, named after the town that borders South Crofty. "Mining is in its blood."
