South32 clears key US hurdle for $2B Arizona mine

The Trump administration has approved South32’s (ASX: S32) Hermosa zinc-silver project in southern Arizona, clearing the final federal environmental review needed for key infrastructure on public land and advancing one of the country’s most closely watched critical minerals developments.

The US Forest Service issued its Final Record of Decision on Tuesday, completing the National Environmental Policy Act (NEPA) review for infrastructure on Coronado National Forest land, including a primary access road, a dry-stack tailings facility and part of a 138-kilovolt transmission line. Construction on the privately owned portion of the project is already about halfway complete.

“From the beginning, we designed Hermosa to be a different kind of mine, and the federal review process helped make it even better,” Hermosa president Pat Risner said. “Years of agency review, Tribal consultation and community engagement strengthened environmental protections, informed project refinements and shaped a project that can transform the local economy.”

The decision marks another milestone in the US effort to expand domestic critical minerals production as the Trump administration seeks to reduce reliance on China for metals used in manufacturing, defence and advanced energy technologies.

The $2 billion Hermosa project was the first one accepted into the federal FAST-41 permitting program, which aims to improve coordination and transparency for nationally significant infrastructure projects without reducing environmental oversight.

Review reshaped project

Hermosa, located about 80 km southeast of Tucson could produce as many as five federally designated critical minerals, including zinc, silver and manganese. South32 has said the operation is expected to reach full production by 2029 and intends to prioritize domestic and regional smelters for copper produced at the site.

Federal officials said the project demonstrates that large mining developments can move through the permitting system while maintaining environmental review standards.

“If we’re serious about bringing supply chains back to America and reducing our dependence on foreign countries, we need to responsibly produce more critical minerals here at home,” Senator Mark Kelly of Arizona said. “This milestone shows we can move projects through an efficient permitting process to create good-paying jobs while strengthening our national security.”

The review included more than 120 days of public comment, consultation with 12 Tribes and coordination among six federal and state agencies. South32 said it modified the project during the process by redesigning its dry-stack tailings facility to avoid sensitive plant species, altering the access road to reduce traffic through Patagonia, expanding water monitoring, incorporating wildlife crossings and strengthening measures to reduce emissions, noise and surface disturbance.

The company committed to more than 135 conservation, mitigation and monitoring measures, many of which will become enforceable under the approved mine plan.

South32 says Hermosa will occupy about 750 acres, use roughly 90% less water than comparable regional mines and support up to 900 jobs during peak operations.

The project is expected to become one of the largest new sources of critical minerals in the US as policymakers seek to strengthen domestic supply chains.