Woulfe Mining Corp., preparing to close an investment agreement with a unit of Warren Buffett’s Berkshire Hathaway Inc., will start up a tungsten mine next month that it projects will become the biggest in the world.

Woulfe will raise $20 million in convertible notes in June to begin digging rock ready to be processed at the South Korean Sangdong mine, Chief Executive Officer Brian Wesson said in an interview in London. The company is waiting for Berkshire Hathaway’s IMC International Metalworking Companies BV unit to commit to $70 million of investment in the project.

“It took us six months to negotiate,” Wesson said. “They are a huge company, they don’t do things for the hell of it.”

Woulfe, based in Vancouver, is in talks with South Korean banks over $120 million in funds for its part of the investment, Wesson said. “We have final term sheets with some big banks in Korea,” he said. “They are moving into final due diligence.”

Tungsten prices have risen as China imposed export curbs on raw materials including the rare earth, causing world supplies to plummet and threatening strategic stockpiles. China is the largest supplier of 28 of the 52 elements on the Geological Survey’s risk list. Tungsten was also one of the metals cited when U.S. President Barack Obama filed a complaint to the World Trade Organization on March 13 against the Chinese restrictions.

IMC, 80 percent-controlled by Berkshire Hathaway, signed an agreement with Woulfe to invest $35 million to develop the $115 million mine and the same to build a refinery, Wesson said. It will decide on closing the deal by the end of the month — after reviewing a feasibility study Woulfe prepared — in exchange for a quarter stake in the mine and 55 percent of the refinery.

Bringing Technology

“They will build the refiner,” Wesson said. “They’ll design it, they’ll build it and they’ll ensure quality. They came with technology, with size and with market and branding.”

Woulfe plans to ship 400,000 metric ton units of tungsten, equivalent to 4,000 tons of the metal, from the mine, which closed in 1992 on a flood of cheap Chinese concentrate, he said. The company will begin output of the metal in August 2013.

China, source of about 60 percent of the world’s tungsten, has pushed prices higher by imposing the limits on exports of concentrate, Wesson said. The price of ammonium paratungstate, the traded form of the metal, rose 32 percent in 2011 to more than $440 a ton unit, according to European price data from Metal Bulletin. The material traded at less than $65 in 2003.

IMC doesn’t list a phone number or e-mail address for the parent company on its website. Subsidiary companies listed on the site were unable to provide contact details.