Tariffs Threaten to Raise Costs at South32’s Hermosa Mine in Arizona

South32’s Taylor zinc, lead, and silver mine in southern Arizona may see its construction costs rise due to new tariffs, according to analysis from Canaccord Genuity. The Hermosa project, which has already seen $539 million invested, is expected by Canaccord to require $2.6 billion to complete-higher than the $2.16 billion figure previously announced by South32.

Analyst Alex Bedwany from Canaccord noted that the mine’s economics are already marginal, and that tariffs could add further inflationary pressure to the project’s budget. Although tariffs might support higher prices for metals produced within the United States, Canaccord pointed out that Hermosa’s products will be sold as concentrates and are likely to be exported, meaning they will be priced according to international markets rather than benefiting from potentially higher domestic prices.

South32’s Hermosa project is currently the largest private investment in southern Arizona, with plans for the Taylor deposit to produce zinc, lead, and silver concentrates. The company expects initial production to begin in the first half of 2027.