The Forward - Issue 05: South 32

Mining & Resources · Climate Change Action Plan

Last week we looked at Bellevue Gold and the operational story sitting inside what looked like a sustainability story. South32's second Climate Change Action Plan, published August 2025, repeats the pattern at much larger scale. The headline that drove media coverage was Mozal Aluminium going onto care and maintenance on 15 March 2026, six months after the CCAP named that as the likely outcome. Mozal is why most people will pick up the document. It is not the most interesting thing in it. Three other passages tell a more useful story.

Published 14 August 2025 · 40 pages · Second-iteration CCAP (first issued 2022) · Subject of non-binding advisory shareholder vote at the 23 October 2025 AGM, passed with 90.05% in favour · Accompanied by the FY25 Annual Report (released 28 August 2025), Climate-related Risk and Reporting Methodology 2025, and Sustainability Databook 2025. Aligned with TCFD; references AASB S2 / IFRS S2 readiness.

Mining & Resources ASRS Group 1 Engineering Led

Annotated with plain-English context and our take on what it means for you

Passage 01 - Worsley Alumina and the technology that doesn’t yet exist

"A concept study (completed in FY23) exploring technically viable decarbonisation pathways identified full electrification as the refinery's long-term path... Electrification is seen as the likely solution for low-carbon calcination; however, significant technology development is still required and green hydrogen may have a role to play. Full electrification will require significant upgrades to the South-West Interconnected System, which currently lacks sufficient capacity."

- South32 Climate Change Action Plan 2025, page 16

Our Take

Worsley is 16% of South32's operational emissions, sits in WA's Collie region, and is covered by the Safeguard Mechanism. The interim solution is fuel-switching, with two of five boilers now converted from coal to gas, delivering more than 10% reduction in refinery emissions versus FY21. The longer-term solution depends on commercialising steam electrification (currently at pre-feasibility study with A$4.4 million from ARENA), low-carbon calcination technology, and large-scale upgrades to the South-West Interconnected System. The Safeguard Mechanism requires reductions now. The technology to deliver them at scale does not yet exist. The CCAP is honest about that gap, and the gap is engineering, not reporting.

💡 Plain English: Worsley's pathway depends on technology that has not been commercialised, a grid that has not been upgraded, and capital that has not been committed.

Passage 02 - Hermosa and what design-from-scratch looks like

"Featuring a small surface footprint, efficient water use, and dry-stack tailings, Hermosa's design reflects our commitment to sustainable development. We are working to lower Taylor's carbon footprint through three pathways: Next-generation mine design... Fleet electrification: We have committed to the phased deployment of 34 battery-electric vehicles, forming part of Taylor's 77-unit underground fleet. Deliveries will commence in 2026, through to 2030; and Low-carbon energy: We are actively engaging with local utilities and independent power producers to evaluate renewable energy and firming solutions..."

- South32 Climate Change Action Plan 2025, page 9

Our Take

Hermosa is in Arizona, but the lesson translates. It is the first mining project added to FAST-41, the US federal permitting program, with a US$20 million Department of Defense grant and up to US$166 million from the Department of Energy. The fleet decision is concrete: 34 of 77 underground vehicles battery-electric, FY26 to FY30. Dry-stack tailings, automated mine design, small surface footprint. The company's claim that Hermosa could be "among the world's lowest emissions-intensity primary zinc producers" is forward-looking and based on modelling — a target architecture, not a current state. The verifiable commitments are the substance, and for any Australian critical minerals developer entering PFS or DFS now, this is the operational case study worth understanding.

⚠️ Plain English: Hermosa is being built around its climate plan, not having a climate plan retrofitted onto it.

Passage 03 — Groote Eylandt and the unfashionable other half of climate practice

"In March 2024, extreme weather associated with Tropical Cyclone Megan produced record rainfall of 681mm over a 48-hour period, along with some of the strongest wind gusts recorded in 20 years. Mining pits were flooded and significant damage caused to infrastructure, resulting in a temporary suspension of operations... Our Australia Manganese team have introduced several targeted enhancements to further strengthen preparedness: Site-specific weather portal and dashboard... Upgraded weather buoy near the port... Satellite-derived rainfall predictions... Catchment-based flood alert system..."

- South32 Climate Change Action Plan 2025, page 21

Our Take

This is the part of climate practice that does not get attention because it is not about emissions. Adaptation is half of what every credible climate plan addresses, and it is overwhelmingly an engineering and operational discipline. Cyclone Megan dumped 681mm of rain in 48 hours on Groote Eylandt. Operations stopped. South32 booked a Megan adjustment in its FY24 financials. In response, Australia Manganese has built site-specific weather portals, upgraded a marine weather buoy, layered satellite rainfall prediction, and stood up a catchment flood alert system with seven-day forecasts. For executives setting up adaptation programs in the next twelve months, this is the workflow: event, response, system, upgrade, operational.

🔺 Plain English: Adaptation is half of climate practice. It is mostly engineering. It rarely makes headlines.

Scope 1, 2 & 3 Emissions:

The three categories of greenhouse gas emissions under the GHG Protocol. Scope 1 covers direct emissions from sources a company owns or controls - for South32 in FY25, this includes coal and gas combustion at Worsley Alumina, anode consumption at the aluminium smelters, and fugitive emissions across operations. Scope 2 covers indirect emissions from purchased electricity and is the single largest driver of South32's reported operational emissions, given Hillside and Mozal's grid-supplied power. Scope 3 covers all other indirect value-chain emissions. For South32 in FY25, more than 90% of operational (Scope 1+2) emissions came from the aluminium value chain - Hillside, Mozal and Worsley.

Safeguard Mechanism:

The Australian regulatory regime that requires facilities emitting more than 100,000 tonnes CO2-e per year to reduce their emissions intensity by 4.9% annually to 2030, with convergence to industry average emissions baselines. Worsley Alumina is a covered facility. The Mechanism applies regardless of whether the technology to deliver the required reductions exists at commercial scale - a recurring tension across heavy industry compliance.

Dry-stack Tailings:

A tailings management method in which mining waste is filtered to remove most of the water and then deposited as a stackable, partially dewatered material rather than stored as slurry behind a dam. Dry-stack tailings substantially reduce water consumption, eliminate the risk of tailings dam failure of the kind that occurred at Brumadinho and Mount Polley, and simplify closure. Hermosa is using dry-stack tailings; most legacy Australian operations rely on conventional wet tailings storage facilities.

⛏️ This week at CFS - Groundwork™ and Project Execution

South32's CCAP 2025 demonstrates what climate planning looks like when it is treated as project execution rather than disclosure. Worsley names its technology dependencies. Hermosa is being engineered around its climate plan. Australia Manganese has built operational adaptation systems in response to a real event. The common thread is that the climate work that matters is done in the engineering and operational layers, not the reporting layer.

Cantilever's Groundwork™ service line is built on exactly this principle - ESG delivered concurrently with PFS, DFS and Build studies, mapped to capital raise cycles. For developers and operators wanting climate strategy that holds up to a board director's question about project execution, get in touch by emailing Bronwyn directly.

CFS Cantilever Future Solutions

ESG & sustainability advisory · Mining, Energy

Perth, Western Australia

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