There is a big new player in Patagonia. South32 is the Australian mining company that recently purchased Canada-based Arizona Mining Inc for its flagship project, the Hermosa Mine. The $1,300,000,000 deal closed in August 2018. On Oct. 21, South32 held its first community tour of the Hermosa site, led by senior South 32 staff: Richard Luck, Hermosa project director; Johnny Pappas, head of permitting for the project; and Greg Lucero, community and government a airs director. The PRT was there and this is what we saw and heard from the South32 leaders of the Hermosa Project.

The Company

South32 is a relatively new company, spun off in 2015 from one of the largest mining companies in the world, BHP Billiton. South32 has ac ve mines on four con nents – Australia, Africa, North America, and South America. The company mines alumina, aluminum, bauxite, coal, lead, nickel, manganese, silver, and zinc.

The Hermosa Project

The Hermosa project is located six miles southeast of Patagonia on 450 acres of private land. The site includes the remains of the old Trench Mine. South32 has two major efforts underway at the Hermosa site: reclamation, or cleanup, of the Trench Mine and development of an underground mine to extract significant deposits of zinc, lead, and, to a lesser extent, silver. When in full production, the Hermosa mine will be among the top five producers of zinc in the world. Zinc is a component of galvanized metals and most batteries; lead’s primary use is for batteries.

Arizona Mining Inc, a “junior” mining company, began exploratory drilling at the Hermosa site in 2015. South32, a senior mining company with the financial resources to fully develop and operate the mine, purchased AMI in 2018. The current schedule has production beginning in 2021. Active mining could continue for approximately 30 years. However, to mine the entire deposit and manage the tailings will require expansion of the active mine site to unpatented claims on adjacent federal lands.

Visible at the Hermosa site is a large reclamation on pit where piles of tailings from the Trench Mine are being relocated, a new $5M water treatment facility, and two platforms in twin declines (tunnels) being drilled now to reach the ore deposit 1,500 feet below the surface. There are also numerous roads, outbuildings, and heavy equipment throughout the 450-acre active site. When the development phase is completed, the mine will extract and initially process the raw ore on-site.

There are now about 200 employees at work. Drilling is a 20/24 opera- on with two 10-hour shifts working three weeks on and one week off . At the height of construction, there may be as many as 1,000 people on site. Once the mine is fully operational, Luck estimates it will employ approximately 500 people. Up to a third will be college-educated technical and supervisory people and the remaining employees will come from the skilled trades or be trained on site through South32’s certification programs.

To date, no decisions have been made on the route for transporting the processed ore from the mine. It is likely that the it will go through Mexico for distribution. Lucero and Luck said there are three basic route options under review: Harshaw Road, Flux Canyon Road, and Duquesne Road. All options will require a significant investment. Luck added that they are trying to bypass the Town of Patagonia.

What does it mean for our community?

Housing is tight in Patagonia. According to Lucero, South32 employees have “gobbled up what was available and that demand has driven up the price of housing.” Employees will probably also live in Rio Rico, Nogales, Sierra Vista, Vail, Green Valley, or Tucson. When asked where the housing will come from, Luck said “The market will provide.”

South32 expects to bring approximately 500 long-term living wage jobs to the region. Some of those jobs will go to Patagonians or other residents of Santa Cruz County. Although the majority of employees may not live in Patagonia, the mine’s proximity will mean more people in town, requiring more public services and private amenities, increasing traffic on roads, and spending money in local businesses. A study commissioned by AMI, authored by researchers at the WP Carey School of Business at Arizona State, projects that every new permanent job created by the Hermosa project could generate up to seven additional jobs in the region.

Luck estimates that the Hermosa project, at full operations 24/7, will draw about 200 gallons per minute of water. All water will come from the mine property itself; no water is expected to be trucked in for mining operations. Further, South32 states that the water used for the project is from a different watershed than the source of Patagonia’s water and asserts that the mining use should have no impact on the Town’s water, a point of contention for many residents.

The company says that water quality should improve with the clean-up of the Trench mine and be maintained through the capability of the water treatment plant to treat all effluents from mining to drinking water standards.

At full production there will be approximately 100 trucks per day leaving the mine site carrying processed ore to the distribution points. There will also be trucks coming through town, including water trucks bringing potable water to the site, employee transport vans, trailers with heavy machinery, and other company vehicles. The company plans regular watering of gravel roads to limit dust. Luck also suggested the added truck traffic on local paved roads will compact the asphalt, extending the life of the road, an assertion disputed by many.

The Patagonia Mountains are one of the most biologically diverse regions in the Americas and the home of a growing ecotourism-based economy. When asked about environmental impacts of the mining opera on, Pappas said that the Hermosa Project is committed to meeting all county, state, and federal regulations and permit requirements and that environmental protection regulations are stronger in the U.S. than anywhere else in the world.

“Our presence here will mean changes in the local community, that’s for sure” said Luck. “We see most of those changes as positive.” There are other voices in the community who see the impacts of mining in the Patagonia Mountains very differently. They fear its impacts on the land, water, wildlife, quality of life, character of the town, ecotourism, and long-term economic health of the community.

By Lynn Davison

Photo Credit Lynn Davison