South32’s $4.7bn Hermosa project clears key US approval as critical minerals push accelerates
South32 Ltd (LSE:S32, ASX:S32, FRA:32Z, OTC:SHTLF, JSE:S32) has secured a major US federal approval for its US$4.7 billion Hermosa critical minerals project in Arizona, advancing one of the company’s most important growth assets and a strategic new domestic source of zinc, manganese, silver and copper for the United States.
The US Forest Service has issued its final Record of Decision for Hermosa, completing the federal National Environmental Policy Act process after several years of environmental review, public consultation, Tribal engagement and interagency assessment.
The approval supports the US Government’s push to strengthen domestic critical minerals supply chains and reduce reliance on foreign sources for materials used in energy, manufacturing, advanced technologies and infrastructure.
Critical minerals project gains momentum
Hermosa is the first mining project to be added to and covered under the US federal FAST-41 permitting program, which is reserved for major infrastructure projects that meet national benefit criteria.
The decision marked a significant milestone for a project designed to become a new-generation underground mining operation.
“From the beginning, we designed Hermosa to be a different kind of mine, and the federal review process helped make it even better,” South32 Hermosa president Pat Risner said.
Construction is already about halfway complete on private land.
Taylor mine under construction
The first development at Hermosa is the Taylor zinc-lead-silver underground mine, which is targeting nameplate production of 123,000 tonnes of zinc, 8.2 million ounces of silver and 155,000 tonnes of lead.
South32 is also studying future copper expansion potential at the broader Hermosa project, which could ultimately produce up to four US government-designated critical minerals: zinc, manganese, silver and copper.
First production from Taylor is expected in the second half of FY28.
The project is central to South32’s growth strategy following the company’s multibillion-dollar aluminium asset selloff to Alcoa (NYSE:AA), with Hermosa seen as a potential US counterpart to the company’s high-margin Cannington zinc-lead-silver underground operation in Queensland.
Strategic asset for South32
Hermosa is emerging as one of South32’s key long-term development platforms and an early test for new chief executive Matt Daley, who succeeded long-serving boss Graham Kerr on July 1 after joining the company from Anglo American.
The project’s approval also comes as the US sharpens its focus on critical mineral independence and supply chain security.
US Agriculture Secretary Brooke L Rollins said Hermosa demonstrated how domestic production could reduce reliance on vulnerable foreign sources while supporting energy, manufacturing and infrastructure priorities.
South32 shares were 2% lower at A$3.93 in current trade.
