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First production from Taylor — the first development at South32’s broader Hermosa project — has been pushed back by approximately a year from the previous guidance of the first half of 2027, the company said.
Nameplate processing capacity of 4.3 million tpy is expected by June 2031, delayed from June 2030.
Annual steady-state output is expected to average 123,000 tpy of payable zinc, 155,000 tpy of payable lead, and 8.2 million ounces per year of silver, down by 6.8%, 4.9% and 3.5% respectively. South32’s feasibility study guidance estimated 132,000 tonnes of zinc, 163,000 tonnes of lead, and 8.5 million ounces of silver.
Total payable production over the project’s initial operating life is expected to reach 3.7 million tonnes of zinc, 4.6 million tonnes of lead and 247 million ounces of silver.
The delays are due to contractor underperformance, as well as engineering and procurement delays on shaft sinking. The company said intervention measures — including strengthening contractor leadership, engaging specialist performance advisers and bringing critical scope under direct owner management — had only partially offset the impact.
“First production is expected in [the first half of 2028] and nameplate capacity by [June 2031], reflecting our revised expectation for shaft construction, due to contractor performance and productivity challenges,” South32 chief executive officer Graham Kerr said.
Fastmarkets’ twice-monthly assessment of the zinc spot concentrate TC, cif China, was $(20)-5 per tonne on April 24, down from $(15)-15 per tonne on April 10.
The project update also flagged future copper output potential at Hermosa via the adjacent Peake deposit.
South32 said the mineral resource estimate for Peake was increased by 32% to 33 million tonnes at 0.87% copper, 0.28% zinc, 0.32% lead and 36 grams per tonne of silver. The previous estimate, dated June 30, 2025, was 25 million tonnes at 0.79% copper.
The entire Peake resource remains classified as inferred – the lowest confidence category under the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC) code.
The Taylor process plant has been designed with flexibility to allow for the addition of “a low-cost copper circuit… from Peake and Taylor Deeps,” South32 said.
Total metallurgical recovery assumptions disclosed for Peake are 73% for copper, 75% for zinc and 85% for lead, with silver recovery of 52% to the lead concentrate and 30% to the copper concentrate.
South32 has not disclosed a development timeline for Peake beyond “medium to longer term.”
Taylor’s initial operating life was extended by approximately five years to about 33 years.
The ore reserve estimate was raised by 52% to 99 million tonnes at 3.95% zinc, 4.50% lead and 77 grams per tonne silver, compared with the previous estimate dated June 30, 2025, of 65 million tonnes at 4.35% zinc, 4.90% lead and 82 grams per tonne silver. The reserve underpins approximately 25 years of the operating life, South32 said.
Mined ore grades over the life of the operation are expected to average 3.7% zinc, 4.1% lead and 76 grams per tonne of silver, marginally below the feasibility study guidance of 3.9% zinc, 4.3% lead and 78 grams per tonne of silver. South32 said the larger volume of ore offset the slightly lower average metal grades.
Operating costs have been revised to approximately US$100 per tonne of ore processed, up from approximately US$86 per tonne at the feasibility study, reflecting general inflation and higher assumed energy costs, the company said.
Hermosa was the first mining project added to the US government’s FAST-41 critical infrastructure permitting process. South32 said federal permitting under FAST-41 was progressing on schedule, with a final record of decision and notice to proceed on track for the second half of 2026. All state approvals required to construct Taylor have been granted.
Taylor concentrates will be transported by road from the site to the port of Guaymas in Sonora, Mexico, or to Corpus Christi, Texas, for export, South32 said.
Fastmarkets assessed the lead spot concentrate TC, high silver, cif China at $(280)-(200) per tonne on April 24, up from $(280)-(220) per tonne a month earlier.
Fastmarkets assessed the lead spot concentrate TC, low silver, cif China at $(200)-(160) per tonne on April 24, also up from $(210)-(180) per tonne a month earlier.
Fastmarkets calculated the weekly copper concentrates TC index, cif Asia Pacific – the midpoint between smelter and trader buying levels – at $(115.10) per tonne on Friday May 1, down by $7.80 per tonne from $(107.30) per tonne a week earlier.
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