South32’s Pat Risner updates the BOS in July on the progress of the Hermosa Project. Photo by Wendy Islas

Things have been moving quickly the last two months for South32’s Hermosa Project. Of particular interest to residents of eastern Santa Cruz County are the federal government’s “Fast-41” decision to fast track the permitting process for the mining operation in the Patagonia Mountains, resistance to the idea of locating a manganese processing plant and operations center in Rio Rico, the revaluation of the project by parent company South32, and the potential for the company to sign a Good Neighbor Agreement.

In an interview with the PRT on July 7, Hermosa Project President Pat Risner discussed the expedited permitting of the project by the federal government. “We don’t need a NEPA [National Environmental Policy Act] process to get started on our private land,” Risner said. “It’s really just some ancillary infrastructure to support the full development that impacts federal lands, not the initial mine development itself. However, this NEPA process is really important because long term, for the full development, we do have some impacts on federal land.”

Hermosa is the first mining project in the U.S. to be selected for fast tracking the permitting process, the approval being predicated on the zinc and manganese deposits at Hermosa, which are identified as critical minerals as the US moves to become less reliant on foreign supplies. August 8 is the deadline for South32 to submit its Plan of Operations to the U.S. Federal Permitting Improvement Steering Council, the agency in charge of expediting the permitting process for the Hermosa Project.

Traffic Concerns
Risner pointed out that the expedited permitting could speed up the process for the development of the ‘Gas Line Route.’ The company is constructing the Cross Creek Connector (CCR), purportedly a temporary road for transport of construction materials, workers and ore, that will run from Harshaw Rd. to SR82. Opponents are concerned about the heavy traffic on narrow, rural roads north through Sonoita and south through the town of Patagonia. The Gas Line route would provide access from the mine to SR82 south of Patagonia, sending traffic towards Nogales. “Getting …that route as soon as possible is a priority for us, as well, and we believe that long term that route being the primary route for the bulk of the life of the mine,” Risner said. “It does address some of the concerns that have been raised by the community about traffic, so we are still committed to that.”

In response to Supervisor Bruce Bracker’s question at the July 18 Santa Cruz County Board of Supervisors’ meeting about the safety of ore trucks traveling over public roads, Risner replied, “We will truck from the site to the production facility in ‘rotainers’ that are sealed. Even if they fall off the truck, they are essentially indestructible. They cannot bust open. So, this material never gets exposed to the environment. We will monitor community dust levels along those routes. We will have a baseline dust level prior to doing anything so we understand what it was before our activity. And we will have the community baseline health and hygiene information just like we do with our employees.”

South32 is currently estimating that it will be trucking manganese ore from the Hermosa mine for 60 years.

Manganese Processing Plant and Remote Operations Center
South32 plans to build a plant to produce battery grade manganese. During his presentation at the Santa Cruz Board of Supervisors (BOS) July 18 meeting, Risner said they were evaluating several potential locations for the facility but would prefer to locate it within Santa Cruz County to create local jobs and increase local supplier opportunities. He noted the facility would require approximately 150-250 acres.

South32 also plans to build a Remote Operating Center to allow employees to remotely monitor and operate the underground equipment at the Hermosa site. This facility “can enhance safety and productivity, reduce commuter traffic, and enable a more diverse workforce. It can also help us deliver on our target of hiring 80% of our employees from Santa Cruz County,” Risner said in a letter sent to the Tucson Sentinel posted on July 22.

After strenuous community objections were raised to the development of property owned by Rio Rico resident Andrew Jackson along I-19 in Rio Rico, potentially a location for both the remote operating center and the manganese plant. (See related article on p. 2), Jackson withdrew his development proposal on July 31. Risner has stated that although South32 would like to locate the operating center and the manganese plant in Santa Cruz County, the company has other options. In his presentation to the BOS on July 18 he said, “If there is a desire for these facilities not to be in Santa Cruz County, we can look for other alternatives in southern Arizona.”

Good Neighbor Agreement
Risner was asked by the PRT if South32 would be willing to sign a Good Neighbor Agreement with the Town of Patagonia and the County. A good neighbor agreement (GNA) is a legally binding contract that holds corporations accountable for their environmental conduct. South32 has been discussing the creation of a GNA with its Community Advisory Council. “It’s on the agenda,” said Risner. “It is something we are interested in pursuing and that we think is important.”

Carolyn Shafer, a member of the Advisory Council and President of the watchdog group PARA, concurred that the GNA was essential. “It is important because there must be oversight of proposed industrialized mining activity and mining company accountability to the community to avoid short sighted destruction of natural resources in pursuit of corporate profit,” she told the PRT.

Hermosa Value Lowered
On July 24, South32 announced in its quarterly report that it would take a $1.3 billion “impairment charge” on the Hermosa project. Impairment charge is an accounting term used to describe a drastic reduction or loss in recoverable value of an asset and can occur because of a change in legal or economic circumstances, or as the result of a casualty loss from unforeseen hazards.

“The rising costs of construction materials, COVID-19 delays and greater than expected dewatering costs all contributed to the drop, according to South32’s latest quarterly report,” reported the Tucson Sentinel. “After the cut, the total carrying value of the project stands at just over $1 billion.”