BHP is set to invest up to $100million in Tanzania’s Kabanga Nickel Project as it seeks to access the metals and minerals needed for the electrification of the global economy.
World’s biggest mining company’s decision to invest the funds in private UK miner Kabanga Nickel, which is developing the project, marks a further shift in strategy for BHP, which has traditionally focused on less risky mining jurisdictions such as Australia, Chile and Canada that have been extensively developed.
It is also a recognition by BHP, which sold its last Africa asset in 2019, that to get access to the best untapped mineral deposits it will have to operate in more challenging parts of the world and partner with smaller companies.
Under the deal, BHP will invest $40m to accelerate development of the Kabanga deposit and a further $10m in the hydrometallurgy refining process. Subject to certain conditions and milestones being achieved, BHP will invest a further $50m, giving it an 18 per cent stake in Kabanga Nickel. That will value the project at about $650m.
Expectations
The project’s new owner, Kabanga Nickel, anticipates first production in 2025 and says the deposit has the resources to churn out at least 40,000 tonnes a year of battery grade nickel for more than three decades. It will also produce 4,000 tonnes a year of cobalt, another battery metal.
The 2.7m-tonnes-a-year global nickel market is expected to grow rapidly owing to the increasing popularity of electric vehicles. Demand for the metal, which is used in more powerful EV batteries, is set to grow 19-fold by 2040 if the world meets the Paris climate goals, according to the International Energy Agency.
Kabanga is planning to refine the ore it produces in Tanzania, using a hydrometallurgy technology that it claims is less polluting and carbon-intensive than other methods. This, it says, will eliminate the need to export the ore long distances for processing in Europe or Asia, further reducing its carbon footprint.
“Through development of Kabanga. Tanzania will have a growing role in the supply of the battery metals needed to move to a global low carbon economy,” said Chris Showalter, chief executive of Kabanga Nickel.
Doto Biteko, Tanzania’s minister of minerals, said: “We now stand ready to help the world in the production and refining of the crucial metals that society needs, while creating skilled jobs and benefiting the economy of our country.”
