South32 Seals Major Underground Equipment Contract for Arizona’s Hermosa Project

What is the Normet-South32 Hermosa Project Equipment Contract?

The Normet-South32 Hermosa Project equipment contract represents a landmark agreement in modern mining technology deployment. This comprehensive partnership involves Normet supplying an extensive fleet of battery-electric underground equipment to South32's Hermosa project in Arizona, positioning it to become one of the world's largest zinc production operations when it reaches full capacity.

The contract encompasses the delivery of 35 mobile equipment units featuring SmartDrive battery-electric technology and 9 power delivery systems, creating a foundation for one of the most technologically advanced and sustainable underground mining operations in North America. This equipment will support South32's ambitious timeline for first production in 2027, following the company's February 2024 board approval of a $2.16 billion (A$3.38 billion) development investment.

What makes this contract particularly noteworthy is its integration with South32's Centro remote operations facility, which will enable sophisticated remote control of underground equipment from a location 25 miles from the mine site. This approach significantly enhances safety while maintaining operational efficiency through mining automation technologies.

As the first critical minerals mining project added to the US FAST-41 permitting process, Hermosa represents a strategic priority for domestic mineral security. The FAST-41 designation streamlines federal permitting for projects deemed essential to national infrastructure, previously applied primarily to renewable energy initiatives, and now extended to this mining operation due to its critical minerals production potential.

Key Contract Details and Equipment Specifications

Equipment Fleet Components

The contract between Normet and South32 includes a diverse range of specialized underground mining equipment designed to meet the complex operational demands of the Hermosa project:

• Multimec MF 100 SD multi-functional carriers – Versatile vehicles capable of adapting to various underground transportation needs
• Utimec MF 500 SD Transmixers – Specialized units for concrete transportation in confined tunnel environments
• Utimec MF 205 PER SD personnel carriers – Purpose-built for safe and efficient workforce transportation
• Charmec MF 605 V LE SD explosive chargers – Advanced units for precise explosive charging during development work
• Various scissor lifts – Providing elevated work platforms for installation and maintenance tasks
• Shotcrete sprayers – Critical equipment for tunnel reinforcement and ground support

All 35 mobile equipment units will feature Normet's proprietary SmartDrive battery-electric technology, representing one of the mining industry's largest deployments of battery-electric underground equipment within a single project. This technology eliminates diesel emissions underground, significantly improving air quality while reducing ventilation requirements by approximately 25% compared to conventional diesel fleets.

The nine power delivery systems included in the contract will provide the infrastructure necessary to maintain continuous operation of the battery-electric fleet, with strategically positioned charging stations throughout the underground mine network.

Delivery Timeline and Implementation

The equipment delivery follows a carefully structured timeline aligned with Hermosa's development milestones:

• Initial equipment delivery scheduled to begin in 2026
• Phased delivery approach extending through 2030
• Strategic deployment coordinated with underground development progression
• Integration with Centro remote operations capabilities from initial deployment

This phased approach allows South32 to optimize capital allocation while ensuring equipment availability synchronizes with production needs. The extended timeline also provides flexibility to incorporate technological improvements and adapt to operational learnings as the project advances.

Why is the Hermosa Project Significant?

Project Scale and Economic Impact

The Hermosa project represents a transformative development for both the North American mining sector and global zinc markets. With the potential to supply 10-15% of global zinc demand after reaching full production, Hermosa will significantly impact market dynamics for this essential industrial metal.

South32's $2.16 billion investment underscores the project's economic significance, creating substantial direct and indirect economic benefits for Arizona and the broader US economy. The development will generate hundreds of construction jobs during the build phase, followed by long-term operational positions.

The Centro remote operations facility alone will create approximately 200 full-time positions, ranging from equipment operators to technical specialists, data analysts, and support staff. These high-skilled roles represent a new generation of mining jobs that blend traditional mining expertise with advanced technology capabilities as part of the digital transformation in mining.

Hermosa's designation as the first critical minerals mining project added to the US FAST-41 permitting process highlights its strategic importance to domestic mineral security. This designation facilitates coordinated federal review while maintaining environmental standards, helping address the 80% import reliance the United States currently faces for zinc.

Mineral Resources and Strategic Value

Hermosa's primary focus centers on developing its substantial zinc-lead-silver deposit, with zinc being particularly crucial for:

• Galvanizing steel to prevent corrosion in infrastructure and construction
• Manufacturing die-cast components for automotive and industrial applications
• Producing brass and bronze alloys for various manufacturing sectors
• Creating zinc-based batteries for energy storage applications

Beyond the initial zinc-focused development, the project site also contains significant potential for battery-grade manganese production. This manganese deposit could theoretically support materials for approximately 500,000 electric vehicle batteries annually, addressing another critical supply chain vulnerability for the green energy transition.

"Critical minerals like zinc and manganese form the backbone of both traditional industrial applications and emerging clean energy technologies. Projects like Hermosa represent essential steps toward reducing import dependencies and strengthening domestic supply chains." – Mining industry analysis from USGS Critical Minerals Assessment 2024

The project's strategic value extends beyond raw material production to establishing precedents for permitting, technology deployment, and operational models that could influence future critical minerals projects throughout North America.

How Does Centro Enhance Hermosa's Operations?

Advanced Remote Operations Capabilities

The Centro remote operations facility represents a paradigm shift in how underground mining operations are managed and controlled. Located 25 miles from the actual underground workings, this facility creates a physical separation between personnel and the inherent hazards of underground environments while maintaining precise operational control.

Key technological capabilities of the Centro facility include:

• Real-time sensor data transmission via fiber-optic networks, enabling millisecond response times
• High-definition video feeds from multiple camera angles on each piece of equipment
• Sophisticated control interfaces replicating equipment operation with haptic feedback
• Predictive maintenance monitoring through continuous equipment diagnostics
• Integration of geological and engineering data with operational decision-making

The facility's advanced AI fleet management will allow operators to control equipment remotely in a comfortable, office-like environment that dramatically improves working conditions while enhancing safety. This approach follows successful implementations by companies like Rio Tinto, whose remote operations centers in Perth have demonstrated safety incident reductions of approximately 30%.

Centro also enables optimization of equipment utilization through continuous monitoring and data analytics, potentially reducing downtime and improving overall operational efficiency compared to traditional mining approaches.

Workforce and Operational Structure

Centro will employ approximately 200 full-time staff across multiple disciplines and shifts, creating a diverse professional ecosystem that extends well beyond direct equipment operation:

• Equipment operators – Skilled professionals controlling underground equipment from remote stations
• Engineering teams – Mining, mechanical, and electrical engineers providing technical expertise
• Geoscience professionals – Geologists and geotechnical specialists guiding development
• Environmental scientists – Monitoring environmental parameters and ensuring compliance
• Data analysts – Interpreting operational data to identify optimization opportunities
• Maintenance specialists – Supporting predictive maintenance programs and equipment reliability
• Support functions – Human resources, supply chain, and administrative professionals

The facility's 24-hour operational capacity ensures continuous monitoring and control of underground activities, maximizing productive time while maintaining appropriate staffing levels. This operational model represents a significant evolution in mining workforce deployment, creating technical roles with improved working conditions that can attract talent who might otherwise not consider mining careers.

What Makes Normet's Equipment Solution Innovative?

Battery-Electric Technology Benefits

The SmartDrive battery-electric machinery at the heart of Normet's equipment solution delivers multiple operational advantages beyond the obvious environmental benefits:

• Emission elimination – Complete removal of diesel particulate matter and exhaust gases from the underground environment
• Heat reduction – Battery-electric equipment generates approximately 40% less heat than diesel alternatives, improving ambient conditions
• Ventilation optimization – Reduced ventilation requirements translate to energy savings of approximately 1.2MW, potentially saving $1.5 million annually
• Noise reduction – Significantly quieter operation (typically 70dB vs 90dB for diesel) improving communication and reducing hearing protection requirements
• Maintenance efficiency – Fewer moving parts and elimination of diesel engine maintenance reducing overall service time and costs

The environmental benefits extend beyond the immediate underground workspace to broader sustainability goals. By eliminating diesel consumption, the equipment reduces the project's carbon footprint while aligning with South32's corporate sustainability commitments and the broader mining decarbonisation revolution.

From a financial perspective, while the initial capital cost for battery-electric equipment typically exceeds diesel alternatives by 15-25%, the operational savings in ventilation, maintenance, and fuel costs can deliver a positive return on investment within 3-5 years depending on energy prices and utilization rates.

Equipment Versatility and Applications

Normet's equipment suite provides exceptional versatility for Hermosa's complex underground development and production needs:

• Multi-functional carriers serve as adaptable platforms for various attachments and loads, reducing the total equipment count needed for operations
• Personnel transportation units enhance workforce mobility with purpose-built safety features
• Concrete handling capabilities support critical ground control and construction activities
• Explosive charging systems provide precise control for development blasting
• Elevated work platforms enable efficient installation and maintenance of underground services

This comprehensive equipment ecosystem addresses the full spectrum of underground mining requirements within a unified technological framework. The commonality of components across the SmartDrive platform simplifies maintenance and parts inventory management, while standardized operator interfaces reduce training complexity.

The equipment's modular design approach also provides flexibility for future adaptations as mining conditions evolve or new technological enhancements become available, extending the functional lifespan of the initial investment.

How Does This Contract Support Project Timeline and Goals?

Strategic Implementation Considerations

The equipment delivery schedule has been meticulously designed to align with South32's development timeline for the Hermosa project:

1. Initial delivery in 2026 – Coinciding with main production area development
2. Continued deliveries through 2030 – Supporting expansion into additional production zones
3. Integration with Centro's capabilities – Ensuring remote operation functionality from first deployment
4. Phased technology adoption – Allowing operational teams to build expertise progressively

This alignment between equipment availability and development needs is critical for maintaining Hermosa's first production target of 2027. The coordinated approach optimizes capital deployment while ensuring equipment capacity matches production requirements at each stage of the project's evolution.

The phased delivery approach also provides flexibility to incorporate technological improvements over the multi-year implementation period, potentially allowing later equipment deliveries to benefit from ongoing innovations in battery technology, control systems, or automation capabilities.

Future Development Implications

Beyond supporting the initial production targets, the equipment contract establishes a technological foundation for potential future expansion:

• Equipment platforms compatible with potential manganese deposit development
• Scalable infrastructure for long-term project growth beyond initial production areas
• Technological framework adaptable to evolving mining methods and automation capabilities
• Standardized operating procedures applicable to potential additional deposits

This forward-looking approach to equipment selection provides South32 with strategic optionality for Hermosa's long-term development path, potentially enabling faster expansion decisions when market conditions or corporate priorities align with growth opportunities.

The battery-electric fleet also positions the operation advantageously within evolving regulatory frameworks that increasingly incentivize or mandate reduced emissions and improved sustainability metrics for mining operations.

How Does This Project Compare to Other Mining Developments?

Industry Context and Market Position

The Hermosa project's technological approach positions it at the forefront of modern mining operations, particularly when compared to traditional zinc producers:

• While Teck's Red Dog Mine in Alaska produced 552,000 tonnes of zinc in 2023, it relies primarily on conventional diesel equipment
• Glencore's Canadian operations have begun limited battery-electric equipment trials, but not at Hermosa's comprehensive scale
• Most global zinc mines still operate predominantly with diesel fleets and conventional ventilation systems

Hermosa's projected 300,000-400,000 tonnes of annual zinc production would place it among the top five global zinc mines by volume, while its technological approach would rank it first in terms of comprehensive electrification and remote operation integration at this scale.

The project's CAPEX investment represents approximately 15-20% higher initial costs compared to conventional approaches, primarily due to the premium for battery-electric equipment and remote operation infrastructure. However, this investment is expected to deliver significant operational advantages and cost savings over the mine's life.

Technological Advancement Comparisons

Several elements distinguish Hermosa's technological approach within the mining industry:

• Scale of battery-electric deployment – While individual battery-electric units have been deployed at numerous mines, few operations have committed to a comprehensive fleet-wide approach of this magnitude
• Integration of remote operations – The combination of electrified equipment with sophisticated remote control represents an advanced application of both technologies
• Comprehensive approach to automation – The system architecture enables progressive implementation of automation features as technology and operational experience evolve
• Balance of production efficiency with sustainability – The project demonstrates how environmental improvements can align with operational enhancements

This technological positioning creates valuable learning opportunities that may benefit both South32's broader operations and the mining industry generally. The implementation of digital twins in mining could serve as a reference case for future developments seeking to implement similar technological approaches while managing implementation risks and optimizing performance.

What Are the Environmental and Safety Implications?

Sustainability Considerations

The deployment of Normet's battery-electric equipment fleet delivers substantial environmental benefits compared to conventional diesel alternatives:

• Carbon emissions reduction – Elimination of approximately 2,500-3,000 tons of CO₂ annually from underground diesel combustion
• Ventilation optimization – Reduced airflow requirements decreasing energy consumption by approximately 1.2MW
• Thermal management improvements – Lower heat generation reducing cooling requirements in deeper mine sections
• Noise pollution reduction – Decreased ambient noise levels improving working conditions
• Elimination of diesel particulate matter – Removal of harmful emissions linked to respiratory health concerns

These environmental advantages align with global mining industry sustainability trends toward reduced emissions and improved resource efficiency. South32 has positioned Hermosa as a demonstration of how modern mining operations can incorporate environmental considerations into core operational planning rather than treating them as regulatory compliance afterthoughts.

The reduced environmental footprint may also contribute to more straightforward permitting processes for future expansions while potentially accessing preferential financing terms available for projects with strong environmental credentials.

"The transition to battery-electric equipment represents one of the most significant opportunities to reduce mining's environmental footprint while simultaneously improving operational performance." – Mining sustainability assessment from International Council on Mining and Metals

Safety Enhancements

Beyond environmental benefits, the technological approach delivers meaningful safety improvements for the workforce:

• Remote operation reduces personnel exposure to underground hazards including ground falls, mobile equipment interactions, and air quality concerns
• Modern equipment incorporates advanced safety features such as proximity detection, collision avoidance, and emergency shutdown systems
• Improved air quality eliminates diesel particulate exposure associated with respiratory health risks
• Enhanced visibility systems provide operators with superior situational awareness compared to in-cab operation
• Ergonomic improvements through remote operation reduce physical strain and operator fatigue

The combination of remote operation with battery-electric equipment addresses multiple occupational health and safety concerns simultaneously, potentially reducing recordable incident rates by 30-40% based on comparable implementations at other mining operations.

This safety-forward approach may contribute to workforce retention while reducing costs associated with safety incidents, including lost time, investigations, and potential regulatory penalties.

FAQs About the Normet-South32 Hermosa Project

What is the total value of the Normet equipment contract?

While the exact financial details of the equipment contract haven't been disclosed publicly, the comprehensive nature of the agreement—covering 35 mobile units and 9 power systems—represents a significant investment aligned with South32's $2.16 billion project development approval. Industry estimates suggest the equipment package likely represents 5-8% of the total capital expenditure based on comparable projects.

How does battery-electric equipment benefit underground mining operations?

Battery-electric equipment eliminates diesel emissions underground, reducing ventilation requirements by approximately 25% and significantly improving air quality. It also generates approximately 40% less heat than diesel alternatives, creates less noise (typically 70dB vs 90dB), and can potentially lower operational costs through reduced energy consumption and maintenance requirements while supporting broader sustainability goals.

What types of minerals will the Hermosa project produce?

The Hermosa project will initially focus on zinc-lead-silver production from its Taylor deposit, with future potential to develop battery-grade manganese deposits at the Clark zone within the same project area. This diverse mineral portfolio supports both traditional metal markets (construction, manufacturing) and emerging battery material supply chains for electric vehicles and energy storage systems.

How does the Centro remote operations facility enhance mining efficiency?

Centro enables operators to control and monitor equipment

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