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South32 receives final investment approval to develop Hermosa’s Taylor deposit

Published by , Editorial Assistant
Global Mining Review,

South32 has announced final investment approval for the Taylor zinc-lead-silver deposit, the first development at their Hermosa project in Arizona, US.

The South32 Board has approved the development of Taylor, for direct and indirect capital expenditure of US$2160 million. Taylor is expected to reach first production in 2H27 and deliver nameplate production in FY30.

“Final investment approval to develop Taylor is a major milestone aligned with our strategy to reshape our portfolio toward commodities that are critical for a low-carbon future,” said Graham Kerr, South32 Chief Executive Officer.

Taylor is expected to deliver attractive returns over multiple decades, with the feasibility study confirming the potential for a long-life, low-cost, low-carbon operation, with an initial operating life of approx. 28 years, an average EBITDA margin of approx. 50% and an internal rate of return of approx. 12%.

“Once in production, Taylor is expected to add an additional 8% to Group volumes relative to FY23 levels, increasing our supply of critical commodities and sustainably lifting margins due to its first quartile cost position,” added Graham.

With global zinc demand growth expected to outpace production by around 3 million t to 2031, an industry challenge of similar magnitude to copper, higher incentive prices for zinc are expected as Taylor ramps up to nameplate capacity.

“Since inception, our disciplined approach to capital allocation has supported the significant transformation of our portfolio and consistent shareholder returns.” said Graham.

“With the potential to be one of the world’s largest, lowest cost zinc producers, we expect Taylor will deliver value for our shareholders for decades to come.”

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