Diversified mining company South32 plans to contest the Western Australia Environmental Protection Authority’s (EPA’s) recommendations for its Worsley development project, arguing that the proposed conditions would pose “significant operating challenges" and impact the asset's long-term viability.

The company initiated the environmental approval process for the Worsley mine development project in 2019 to ensure continued access to bauxite to sustain production at Worsley Alumina.

Earlier this month, the WA EPA published its recommendation allowing the project to proceed under stringent conditions, including exclusion zones around rivers, streams, and significant flora and fauna.

“In Worsley Alumina’s view, several of the recommended conditions go beyond reasonable measures for managing environmental risk of the proposal based on scientific assessment and decades of operating experience,” said South32.

The EPA stated that it had intensified rehabilitation and offset requirements for the proposed expansion of the Boddington bauxite mine and Worsley refinery.

The public environmental review over more than five years assessed the proposal’s impacts to flora and vegetation, terrestrial fauna, terrestrial environmental quality, inland waters, greenhouse-gas emissions, social surroundings and air quality. Over this period South32 reduced its proposed native vegetation clearing footprint to 3 855 ha — a significant change to the 7 119 ha originally proposed.

“While this now equates to less than 1% of the Northern Jarrah Forest when combined with its existing approved operations, the proponent has employed substantial mitigation measures to avoid and minimise impacts on significant flora and fauna,” the EPA said in its report.

“The EPA considers rehabilitation of the Northern Jarrah Forest was a key aspect of this assessment and believes the recommended conditions will achieve an environmental outcome that sees the improved restoration of forest values.”

The EPA report also recommends a comprehensive 12 000 ha offsets package which ensures no net loss in significant fauna habitat, as well as regional scale benefits including improved ecological linkages and environmental buffers.

South32 said it would appeal the conditions and that it would work with the EPA with the aim of securing environmental approvals for the mine development by the end of the calendar year.

As a result of the increased uncertainty created by the recommended conditions, South32 said it would recognise an impairment of $554-million, reducing Worsley Alumina’s carrying value to $2.03-billion.

In addition, the miner flagged a $264-million impairment to the carrying value of Cerro Matoso, citing structural challenges in the nickel market. Australia manganese, where operations have been suspended since a cyclone earlier this year, incurred $90-million in costs.

Meanwhile, Worsley Alumina's production decreased by 2% in the 2024 financial year to 3.78-million tonnes, achieving 94% of its guidance. This was owing to a temporary outage of the bauxite conveyor that impacted supply to the refinery during the June quarter.

South32 lowered the asset's production guidance for 2025 by 5% to 3.75-million tonnes to account for additional conveyor repairs and managing bauxite inventories due to regulatory approval delays.