Woulfe to clinch deal for tungsten project in Korea
Woulfe Mining, a Canada-based mining company, is near finalizing a deal to invest some 300 billion won ($260 million) to finance the redevelopment of Sangdong tungsten mine in Yeongwol, Gangwon Province, said a source familiar with the situation.
The investment would also include building a processing plant in the region, with Woulfe’s strategic partner TaeguTec securing a long-term supply of the rare metal materials used for the production of its special industrial tools.
This could be the biggest foreign direct investment to Korea by a Canadian company.
Korea’s Daegu-based TaeguTec is wholly-owned by investment guru Warren Buffett’s Israel-based International Metalworking Companies. Woulfe is among the top 50 companies listed on the Toronto stock exchange’s venture market.
Sangdong was once the world’s biggest tungsten mine whose existence dates back to the Japanese colonial period, the source noted. It had to close several times due to imports of tungsten materials from China in recent years as locally-produced rare metal could not compete in terms of price.
The deal had involved Korea Zinc, a Korean non-ferrous metal developer, but the company is said to have exited due to“differences of opinion.” Korea Zinc has a 9.78 percent stake in Woulfe Mining, according to a regulatory filing in Nov. last year.
The redevelopment of Sangdong had previously faced setbacks last year due to financing, although Woulfe told the local community in Yeongwol of its plans to produce 1.2 million tons of tungsten annually beginning in mid-2013, with a potential value reaching $160 billion, according to the media.
With mining rights and TaeguTec’s strategic offtake agreement, Woulfe is about to clinch its deal, which the company calls “the flagship project,” the source said.
Woulfe said on its homepage that it expects to begin production at Sangdong by the fourth quarter of this year.
Woulfe’s Korean unit could not be reached for comment