Feb 15 (Reuters) - Australian diversified miner South32 Ltd approved a $2.16 billion investment on Thursday for its Taylor zinc-lead deposit and reported a 93% drop in its first-half underlying earnings.

The Taylor zinc-lead deposit is South32's first mine at the Hermosa project in the U.S. state of Arizona. First production from the mine is expected in the second half of fiscal 2027.

Growth capital expenditure for development at the mine is expected to be about $190 million in the second half of fiscal 2024.

Separately, declining output at South32's flagship Illawara project due to two planned longwall moves during the first half of 2024 as well as lower commodity prices impacted the miner's profit. As a result, it declared an interim dividend of 0.4 cents per share, down from last year's 4.9 cents apiece.

Underlying earnings for the six months ended Dec. 31, 2023, was $40 million, compared with $560 million a year earlier.

Longwall configuration is a form of underground mining where a long wall of coal is mined in a single slice.

South32 has planned four longwall moves - switching from mining one longwall to another - over fiscal 2024.

(Reporting by Echha Jain and Sneha Kumar in Bengaluru; Editing by Shinjini Ganguli and Josie Kao)