King Island Sheelite is working towards reopening its open cut tungsten mine, with 90 jobs set to be created if the operation resumes production.
Drilling at the King Island operation, located in the Bass Strait off the north-west tip of Tasmania, is set to start this week.
The company aims to assess how much of the resource remains after mining at the site was halted in 1990 after the price of tungsten crashed, ABC reported.
Chairman of King Island Sheelite Limited, Johan Jacobs, said the mine would create 90 jobs, with the company set to make decision on whether it will pursue the project early next year.
"One of the most important factors in consideration of reopening the mine is the cost of power, because at this stage the island doesn't have sufficient power for us to tap into," he said.
Jacobs estimates that 25 per cent of the mine’s operating costs would be absorbed by power consumption.
"We would have to generate our own power.
"That would have to be done by diesel generating sets and that's a very, very expensive form of power.”
Jacobs said a 200-turbine wind farm proposed by Hydro Tasmania would be an ideal way to source power for its mine.
"There's talk that if the wind farm does go ahead that the harbour will be increased in size and that would allow larger vessels to come in and obviously subsequently reduce the freight costs," he said.
"And if the wind farm does go ahead, we would hope that we would be able to access some low-cost power from that source."
The operation has both federal and state approval to recommence production, with Jacobs stating his company was committed to sourcing jobs locally.
"We would be providing jobs to local people," he said.
"That would be our first priority.
"We can train up, to a very large extent, somebody to operate equipment in a safe manner, in not too long a period.
"In addition to that, obviously there's a lot of administration, procurement and stores type jobs that have to be filled."
Tungsten is used in a range of differing applications in what are known as hard metals, or cemented carbides.
Used in products that require extreme abrasion resistance, the metal is used to make drilling bits, sporting goods, armaments, alloys and cutting tips.
China dominates the global tungsten market in terms of both supply and demand, producing around 86 per cent of the world’s tungsten products and consuming 59 per cent.
King Island Sheelite say the outlook for tungsten is linked to GDP growth.
“While US and European consumption of tungsten has remained fairly static at around 3% per annum for some years, the growth rates of economies such as China, India and other fast developing nations has driven the demand for tungsten up by around 10% per annum.”
It stated that because mine production has been ‘static’ since 2004, a deficit of supply has hit the tungsten market.
Tasmanian Greens leader Nick McKim has previously said he supports the redevelopment of the mine stating his party would support mining projects as long as the benefits are not overtaken by ecological impacts.