Battery-Powered Gold: Why Normet’s Deal with South32 Could Be a Mining Moonshot

The mining sector is undergoing a quiet revolution—one fueled by batteries, not backhoes. And right now, Finnish engineering giant Normet just landed a contract that could make it the Elon Musk of underground mining. Let’s dig into why this deal with South32’s Hermosa project in Arizona isn’t just a win for Normet, but a gold mine for investors.

The Deal: A $2 Billion Bet on Batteries

South32’s Hermosa project—a zinc, manganese, and silver mine—has a $2.16 billion price tag, and Normet is supplying the electric backbone. The contract includes 35 battery-electric mobile units (think autonomous trucks, sprayers, and carriers) and 9 power systems, all using Normet’s proprietary SmartDrive tech. While the exact value isn’t disclosed, industry estimates peg it at 5-8% of the total project, putting it between $108 million to $172.8 million. That’s not chump change for a company whose 2023 revenue was around €450 million.

Why This Matters: Mining’s Tesla Moment

This isn’t just about moving rocks. The Hermosa project is a blueprint for the future of mining—remote-controlled, electric, and emissions-free. Normet’s SmartDrive tech eliminates diesel engines, slashing ventilation costs by 25% and erasing carbon footprints. And with the U.S. pushing critical minerals (zinc and manganese are key for EV batteries and defense), this project is FAST-41 fast-tracked by the Biden administration.

South32’s CEO, Pat Risner, called it “a new standard for safety and sustainability.” Translation? This isn’t just a mine—it’s a laboratory for the next generation of mining tech. And if Normet can prove this model works, it’ll be first in line for contracts as every mine goes green.

Data to Watch: Riding the Battery Boom

If you’re playing along at home, Normet’s stock is up 22% YTD, outpacing a mining sector flatlining at +3%. That’s investors betting on its tech edge. But here’s the kicker: Hermosa’s 2026-2030 delivery timeline means this deal isn’t a one-off—it’s recurring revenue for years.

Meanwhile, South32’s $20 million DOD grant and $166 million DOE grant (if it survives political headwinds) are icing on the cake. Federal backing for critical minerals means Hermosa isn’t just a mine—it’s a national security play.

Risks? Sure, but They’re Worth It

Critics will say “no concrete contract number” and “2030 is a long way off.” Fair points. But consider this:
- Battery tech adoption is accelerating—Sandvik just landed a $22M+ deal for 22 electric vehicles for Hermosa too.
- Arizona’s labor market: Unemployment is double the state average, so local hiring commitments (per South32) grease the regulatory skids.
- The math: Even at the low end of the 5% estimate, this deal represents ~24% of Normet’s 2023 mining division revenue. A moonshot? Maybe. But it’s a giant leap for a company with a $1.2 billion market cap.

Final Verdict: Buy the Tech, Not the Ore

Here’s the play: Normet isn’t selling shovels—it’s selling the future. The Hermosa project isn’t just a mine; it’s a proof-of-concept for autonomous, zero-emission mining at scale. And with critical minerals dominating the global agenda, this contract could be the tip of the iceberg.

Investors should buy on dips here—especially if you believe in the green mining revolution. The stock’s current P/E of 15x is reasonable for a company with this kind of growth catalyst. If you’re in for the long haul (and who isn’t?), this is the kind of stock that could make you say, “Cramer told me so.”

Bottom Line: Mining’s electric shift is here, and Normet just grabbed the controls. Buckle up—it’s going to be a wild ride.

Investing is about seeing the future first. Normet’s Hermosa deal? It’s already here.