Tin mining is poised for a comeback in Cornwall after the UK government invested almost £29m to reopen the county’s last tin mine, creating more than 1,000 jobs in the region.

The South Crofty tin mine, near the Cornish village of Pool, closed in 1998, and in the years since, as tin prices have soared, attempts to reopen it have been unsuccessful.

On a visit to Cornwall this week, Rachel Reeves, the chancellor, estimated that reopening South Crofty could create 1,300 jobs for the region. Back in January the government approved the £28.6m investment to support the reopening of the mine, which is being led by Redruth-based Cornish Metals.

Don Turvey, the chief executive of Cornish Metals, said: “Tin is a critical mineral for the clean energy transition, essential to electronics, electric vehicles and renewable infrastructure. By reviving domestic production at South Crofty, we’re not only creating over 300 direct jobs but also supporting many more across local supply chains and regional businesses.”

The government estimates that a further 1,000 jobs will be created as the company uses more local suppliers such as metal fabricators and electricians, and supports supply chains in the UK.

After operating for more than 400 years, South Crofty was the last tin mine to close in the UK due to lack of investment and falling metal prices in the 1990s.

However, there has been a rise in prices over the past decade – from $16,000 (£11,957) a tonne in 2016 to about $34,000 – with tin used as solder in consumer electronics and other sectors, including electric cars and solar cells.

“Despite having so much potential to grow, Cornwall has been neglected by successive governments, and its families and businesses have suffered as a result,” Reeves said. “Like in every part of the UK, I am determined to unlock growth that creates jobs and puts more money in Cornish people’s pockets.”

The government made the investment through the national wealth fund, supporting its industrial strategy to boost growth in priority industries.

Ian Brown, the head of banking and investment at the national wealth fund, said: “Cornish Metals have made excellent progress as they work towards reopening South Crofty. Our financing is designed to help them crowd further investment into the region, bringing skilled, year-round opportunities, and driving local growth.”

The Vancouver-based Strongbow Exploration acquired the rights to the tin mine in July 2016. The company, which has a dual listing in Canada, changed its name to Cornish Metals in 2020. Cornish Metals listed on London’s junior AIM stock exchange in 2021, raising funds to support mining in the area, including at South Crofty.

Cornish Metals’ share price has soared by 28% over the past year – although it remains down almost a third on five years ago – and has a market value of C$170m (£92m).

Turvey said: “Our focus remains on delivering long-term, sustainable value safely, responsibly, and with deep roots in the community. We’re proud to be playing a role in bringing responsible tin mining back to Cornwall and supporting economic renewal and industrial growth in the region.”