I suspect GK and team have bullish views on Hermosa, which extend beyond a single zinc mine and have not been shared with the market. If that's all we end up with for $2.2b (one zinc mine) I would be annoyed. However as you correctly say, it would be
much cheaper and simpler to give the go ahead for Clark and/or Peake and Flux with all that infrastructure in place as a stage 2 or 3 manganese or copper project. We also do not know what's been implied or half-promised behind the scenes regarding US federal government funding for the Clark site.
We exited thermal coal in South Africa a few years ago. The S32 portfolio has been a work in progress since the BHP demerger. I suspect it's gradually evolving into what management originally intended back in 2015/16. I could not agree more with what you wrote about the mess South African infrastructure and governance is in. I have a couple of South African friends whom I worked with in Asia. None of the South African people I have met while working abroad were keen to return home. It is unusual, and sad to hear people talk so openly and negatively about their home country, but it highlights the complexities of that state. It is also sad when countries like Namibia and Botswana (even The Congo, to a lesser extent) are touted as amongst the better places to operate a mine in Africa. South Africa never rates a mention.
The Intelligent Investor (8th March 2024) is negative on S32 and calls it a
sell, saying:
and
However, the met. coal sale has been widely accepted. Macquarie upgraded us to Outperform last month (with a higher price target)
after the sale announcement; and James Gerrish at Market Matters was satisfied with the deal, taking a very similar view to yours, Ash.
As were Goldman Sachs (as reported in The M.F. on 1st March):
$0.97b vs $1.65b is a vair discrepancy and would pay for a fair few picks and shovels to help get Taylor operational
Aluminium has had a pretty good start to the year too and $2,456 a tonne is a 12 month high. Base metals seem to be following the copper price upwards, at least in the short term.
Good luck to all holders, whom I hope did not spend their dividend payment all at once
(20min delay)