Nexa Resources' 2024 Sustainability Report: A Blueprint for Mining’s Green Transition

The mining sector, long a poster child for environmental and social controversy, is undergoing a quiet revolution. Nexa Resources’ 2024 Sustainability Report reveals not just incremental progress but a deliberate, data-driven strategy to align profitability with sustainability—a model that could redefine investment opportunities in the sector. For investors seeking exposure to a resource company committed to decarbonization, community empowerment, and operational resilience, Nexa’s report provides compelling evidence of its growing leadership.

Ask Aime: "Is Nexa Resources positioning itself as a sustainability leader in the mining sector? How can investors benefit from its commitment to decarbonization and community empowerment?"

Environmental Innovation: From Technology to Biodiversity

Nexa’s environmental initiatives stand out for their measurable impact. The Hydrogen™ technology deployed at its Vazante mine exemplifies this focus: reducing carbon emissions while improving fuel efficiency and air quality. Meanwhile, the reengineering of 12 zinc oxide roasters to run on bio-oil—a first in the industry—is projected to slash CO₂ emissions by 6,440 tons annually starting in 2025. This shift underscores Nexa’s move toward circularity, a trend increasingly valued by ESG-conscious investors.

The Digital Twin technology at Cerro Lindo is another milestone. By creating a virtual replica of the mine, Nexa achieved a 7% increase in milling capacity, 10% reduction in water consumption, and 10% less crusher downtime, while diverting 340 tons of waste annually. Such efficiency gains not only cut costs but also position the company to meet global decarbonization demands.

Biodiversity conservation also features prominently. At its Aripuanã mine, Nexa identified over 500 species, including 18 threatened species, such as the endemic Mico de Aripuanã (Aripuanã marmoset). These efforts align with the Task Force on Nature-related Financial Disclosures (TNFD), signaling to investors that Nexa is preparing for a future where biodiversity risk management is non-negotiable.

Social and Governance: Balancing Stakeholder Needs

Nexa’s social initiatives reflect a commitment to community resilience. The construction of two suspension bridges in Peru and livestock shelters for 30 families in Cerro Pasco highlight its focus on long-term local partnerships. These projects address immediate safety and economic needs while fostering goodwill—a critical buffer against regulatory or reputational risks.

On governance, Nexa’s achievements are notable. Its gender equity leadership, including recognition of a senior executive as one of the world’s 100 most inspirational women in mining, signals progress toward inclusive workplaces. Financially, the company secured US$40 million in ESG-linked credit from Brazil’s BNDES, tied to decarbonization targets. Maintaining ‘BBB-’ investment-grade ratings from S&P and Fitch further underscores its creditworthiness.

Financial Resilience: Profitability Meets Sustainability

Nexa’s financial results reinforce its sustainability-driven strategy. Adjusted EBITDA surged 76% to US$714 million in 2024, fueled by higher zinc prices and operational efficiency. By-product revenue (e.g., silver, copper) added a critical diversification layer. Crucially, capital expenditures remained disciplined at US$277 million, below guidance, freeing cash for high-return projects like the Cerro Pasco Integration Project, which aims to extend mine life and boost profitability.

Strategic divestitures—such as the sale of the Morro Agudo Complex—also signal a focus on core assets. The US$600 million bond offering extended debt maturity, reducing liquidity risks while aligning with its 2050 net-zero target.

Risks and Challenges

No company is without risks. Nexa’s acknowledgment of two fatal incidents in 2024—at El Porvenir and Vazante mines—highlights the persistent dangers in mining operations. While the company has reinforced safety protocols, investor confidence hinges on its ability to eliminate fatalities entirely. Additionally, global zinc demand volatility and regulatory scrutiny of ESG claims remain external threats.

Conclusion: A Compelling Investment Thesis

Nexa Resources’ 2024 report paints the portrait of a mining company transforming itself into an ESG leader. With 6,440 tons of CO₂ reductions annually from bio-oil adoption, a 76% jump in EBITDA, and recognition like the Gartner Eye on Innovation Award, the company is proving that sustainability and profitability are not mutually exclusive.

Its US$37 million investment in Cerro Pasco and US$130 million in ESG-linked financing further cement its alignment with global net-zero goals. While risks like operational safety and commodity price swings linger, Nexa’s strategic focus on innovation, community ties, and transparent reporting positions it as a frontrunner in an industry-wide sustainability pivot.

For investors, Nexa offers exposure to a resource company that is not just adapting to ESG trends but actively shaping them—a rare and valuable asset in today’s markets. As the world demands greener metals for EV batteries and renewable infrastructure, Nexa’s zinc-focused strategy, paired with its ESG credentials, could make it a cornerstone of sustainable portfolios. The question now is whether its execution can match its ambition—and the data so far suggests it is well on its way.