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- South32 (S32) reports a non-cash impairment expense of $1.9 billion for its Hermosa project in Arizona, USA
- Covid-19-related restrictions, dewatering requirements and higher costs associated with estimates were factors toward the impairment
- Meanwhile, South32 CEO Graham Kerr remains optimistic about the project’s future
- Elsewhere, South32 set three annual production records for aluminium, copper, and manganese during FY23
- South32 is down 2.49 per cent, trading at $3.73 at 2:07 pm AEST
South32 (S32) has reported a non-cash impairment expense of $1.9 billion for its Hermosa project in Arizona, USA.
The Hermosa project, which contains of the Taylor zinc-lead-silver and Clark battery-grade manganese deposits, has recently shown the potential for multiple long-life operations in critical minerals.
However, the giant reported a number of factors that negatively impacted the value of its Taylor deposit. These included Covid-19 related restrictions, dewatering requirements and higher costs associated with estimates.
“We are disappointed by the delays resulting from the impact of COVID, the significant dewatering requirements and current inflationary market conditions.” South32 CEO Graham Kerr said.
Despite the setbacks, Mr Kerr remained optimistic about the project’s future.
He highlighted the feasibility study for the Taylor deposit was progressing as planned and has benefited from a 41 per cent increase in the ‘measured’ category.
Meanwhile, the Taylor deposit, which remains open in several directions, holds the potential for further growth.
“The Clark deposit is well-positioned to supply high-purity manganese sulphate monohydrate (HPMSM) for the electric vehicle supply chain in North America, providing a second development option at Hermosa.”
The upgraded MRE for the Taylor deposit provides a solid foundation for future production with a nameplate processing rate of up to 4.3 million tonnes per annum.
The company also aims to continue developments in the Taylor deposit and broader exploration efforts. The feasibility study for the Taylor deposit remains on track for H1 FY24
Elsewhere, South32 reported growth in aluminium, copper, and manganese, setting three annual production records, benefiting our low-carbon future investments for its quarterly results.
Copper equivalent production rose by 9 per cent in June 2023. Aluminium production surged by 14 per cent in FY23.
Alumina slightly declined due to temporary outages, with refineries back to nameplate production rates in FY24.
South32 was down 2.49 per cent, trading at $3.73 at 2:07 pm AEST.
