South32’s fast-tracked Hermosa goes before public

South32’s (ASX: S32) proposed zinc-manganese Hermosa mine in Arizona reached a permitting milestone on Friday following the release of its draft environmental impact statement by the U.S. Forest Service.

Hermosa is currently the only advanced mining project in the U.S. capable of producing two federally designated critical minerals: zinc and manganese. Under the Biden administration in 2023, it was included in the FAST-41 permitting program, the first mining project to obtain this status.

The draft statement comes a year after the forestry service initiated the federal permitting process, which includes disclosing the mine’s plans of operations (MPO) for public input. While it’s a positive development for the Hermosa project, the release doesn’t mean final approval. The project must still undergo further environmental review and public consultation before receiving the necessary permits to proceed.

Situated in the Patagonia Mountains, about 80 km southeast of Tucson, the project comprises the zinc-lead-silver Taylor sulphide deposit and the zinc-manganese-silver Clark oxide deposit. The former is already approved as a $2.6-billion (C$2.32-billion) project, Arizona’s largest. Taylor, which is anticipated to enter production in fiscal 2027, would be a globally significant producer of zinc, with annual production of 114,000 tonnes over an estimated 28-year life.

Shares in South32 fell 1.1% to close at A$2.79 apiece in Sydney on Friday, giving the company a market value of A$12.6 billion (C$11.3 billion).

40% constructed

As all of Hermosa’s mining will be conducted on private lands, the initial project development required
state permits from the Arizona Department of Environmental Quality, which have been obtained. That construction is underway and already 40% complete, South32 said.

As part of the project’s review, the forestry service identified its preferred alternative for how Hermosa should proceed with its mine plan of operations after weighing the benefits and environmental impacts. These include the construction of a 138kV power line, a primary access road, a dry-stack tailings facility updated in the latest MPO, and direct water discharge in the Patagonia Mountains.

“We are designing Hermosa from the ground up so that it is safer, more efficient and less impactful to the environment, combining state-of-the-art technology with best-in-class mining techniques, to deliver minerals America needs for its national and energy security,” Pat Risner, Hermosa’s president, said in a news release Friday.

“South32’s approach to managing environmental risks advances the project in a way that protects public health and safety, biodiversity and water, and honours the cultural and Tribal legacy of the region,” Risner added.

Once permitted and built, the Hermosa mine is expected to support a long-life, low-cost, low-carbon operation. With a surface footprint of 2.43 sq. km and projected to use about 75% less water than other mines in the region, the operation has been designed to minimize its environmental impact.