What's Happening?
South32 Ltd has received a major US federal approval for its $4.7 billion Hermosa critical minerals project in Arizona. The US Forest Service issued its final Record of Decision, completing the federal National Environmental Policy Act process. This approval is a significant
step for South32, as Hermosa is a strategic asset aimed at providing a domestic source of zinc, manganese, silver, and copper. The project is part of South32's growth strategy following its sale of aluminium assets to Alcoa. Hermosa is the first mining project included in the US federal FAST-41 permitting program, which is reserved for major infrastructure projects. The project is expected to enhance US critical minerals supply chains, reducing reliance on foreign sources.
Why It's Important?
The approval of the Hermosa project is crucial for the US as it seeks to strengthen its critical minerals supply chain. By securing a domestic source of essential minerals, the US can reduce its dependency on foreign imports, which is vital for energy, manufacturing, and infrastructure sectors. This move aligns with the US government's strategy to bolster national security and economic stability by ensuring a steady supply of critical materials. For South32, the project represents a key growth opportunity and a test for its new CEO, Matt Daley. The project also supports local economic development through job creation and infrastructure investment.
What's Next?
With the federal approval secured, South32 will continue the development of the Hermosa project, focusing on the construction of the Taylor zinc-lead-silver underground mine. The company is also exploring future copper expansion at the site. The first production from the Taylor mine is expected in the second half of FY28. As the project progresses, it will likely attract attention from stakeholders interested in the US's critical minerals strategy and its impact on global supply chains.
