Island's 'critical' rare metal mine targets expansion

A Bass Strait mine unearthing a rare metal deemed critical by the federal government is eyeing expansion after officially reopening

The Dolphin tungsten mine on King Island, off Tasmania's northwest coast, on August 24 celebrated a return to commercial operations.

It previously operated between 1917 and 1992, when it was closed due to low prices.

Tungsten, used for a variety of purposes including hardening wind turbines, bullets and missiles, is on Australia's critical minerals list.

The list includes 26 minerals considered essential to modern technologies, economies and national security and ones with supply chains vulnerable to disruption.

About 80 per cent of the planet's tungsten supply is dominated by China.

Keith McKnight, chief executive of Group 6 Metals which runs the mine, said tungsten was a "strategic" mineral in the geopolitical environment.

"We do see western consumers of tungsten are actively looking to diversify away from that reliance (on China)," he said. 

The Dolphin mine is expected to have a 13-year life and produce on average 2300 tonnes of tungsten per year.

It has one of the highest quality reserves of tungsten in the western world.

Mr McKnight said there was the potential of extending the operation's life to 20 years, with exploration drilling to take place and the potential for a satellite mine 2km north.

"We’ll probably need to watch this space for the next 24 months," he said.

Group 6 sends 15-20 per cent of the tungsten to Europe, with the remainder going to Traxys, which has a headquarters in Luxembourg, for distribution in the USA, Europe and Vietnam.

The Tasmanian government gave the mine a $10 million commercial loan and a $1.6 million grant to help with establishing energy infrastructure required to restart operations.

Resources Minister Felix Ellis said around $30 million was expected to be returned to the state through mining royalties and other payments.

King Island mayor Marcus Blackie said the mine had helped revive the seaside town of Grassy.

About a third of the mine's 100-strong workforce live on the island, which has a population of about 1600.

Mr McKnight said once the mine reached a positive cash flow, expected later this year, it would be able to contribute more to infrastructure on the island.

"Housing initiatives are very important to the mine and to the island," he said. 

"For us to attract and retain suitably skilled and qualified people to reside on the island we do need to look at housing and improving the quality of housing."

Grassy, which has a current population of about 120, was home to 700 people in the 1970s when the mine was at its busiest.

Ernie Blakeman, 76, who runs a service station on the edge of Grassy was initially sceptical when the mine announced it was reopening.

"(But) it’s brought the town alive again," he said. 

"I didn’t think that I would live to see the day. (Hopefully) we can stem the loss of our young people ... the mine will do that.”

This AAP article was made possible with the support of the Meta Australian News Fund and The Walkley Foundation.

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