Tungsten West (LON: TUN) has just made one of the more amusing stock market announcements of recent times. Well, perhaps amusing isn't quite the right word but it's certainly laughable. For what they've done is announce a tie up between Tungsten West and Oxford Sigma, a fusion energy company. This is like the guys not even mining iron ore yet signing up with a pizza delivery company - pizza delivery uses cars, cars are made of steel, steel uses iron, right? This is not just nonsense it's a waste of valuable management time in even thinking about this sort of thing. In fact, it gets worse than that. If they're spending their time doing this sort of thing then they're not working on getting that mine open, are they?
We do admit to having quite a bit of time for Tungsten West. Is there still tin and tungsten available at the Hemerdon mine? Sure there is. It's well known how to process a joint ore like that, people have been doing it for at least a century. The only limiting factor is whether such mining is profitable - we know that it's possible, we absolutely know that it's possible. Tungsten West does have a problem in that primary tin production from hard rock sources looks to be unprofitable at present, there's too much cheaper to produce alluvial material around. While tungsten metal is valuable the raw material that comes out of a mining operation, a tungsten concentrate, isn't so much.
So the economics at Tungsten West are looking a little bleak. But then that's what the Hemerdon project relies upon - the economics of the mining. The idea of getting involved in tungsten for fusion reactors is absurd.
Tungsten West share price from London Stock Exchange
The point we're making here is a little complex. Fusion, if it even happens, is still a couple of decades away. Yes, if it does happen then tungsten will be an important material for it. But a mine produces a tungsten concentrate. The processing of that concentrate up into oxide, then powder, then sintering for solid metal is an entirely different set of processes. Being a tungsten miner gives you no advantage in that process. More, if you can do that process then there are myriad sources of the tungsten concentrate or even oxide that you then use as your raw material. This whole idea to integrate, that is, is a nonsense.
That Tungsten West thinks this worthy of an announcement to the stock exchange should be taken as evidence that they're having problems getting that mine into production - in our view of course.
Still, it's not often stock market announcements offer a decent laugh but they‘ve managed it - to anyone who grasps the structure of the metals industry at least.
