BHP has invested $40 million into Kabanga Nickel Ltd. to accelerate the development of the Kabanga Nickel Project in Tanzania, the world’s largest development-ready nickel sulphide deposit. In parallel, BHP has invested US$10 million into Lifezone Ltd. to advance the rollout of its patented hydrometallurgical technologies. Lifezone hydromet is more cost-efficient than smelting, has a significantly lower environmental impact, and will ensure that finished Class 1 battery-grade nickel, copper and cobalt will be produced in Tanzania, according to the company.

Kabanga Nickel CEO Chris Showalter said the partnership “highlights the world-class nature of the Kabanga deposit and its importance in helping meet the crucial decarbonization challenge facing the world today. BHP is the ideal partner for Kabanga Nickel, bringing significant advantages and expertise that will enable us to move ahead with the project.”

He added that the development of Kabanga and Lifezone hydromet will allow Tanzania to have a growing role in the supply of the battery metals needed to move to a global low carbon economy.

“Thanks to the work of Kabanga Nickel, and our own natural resources, 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,” said the Hon. Doto Biteko, minister of minerals for Tanzania.

BHP will invest US$90 million in unsecured convertible securities in Kabanga Nickel in two tranches. An initial US$40 million, followed by a further US$50 million on successful agreement of definitive documentation and satisfaction of certain other conditions.

The first tranche of US$40 million will convert into an 8.9% equity stake in Kabanga Nickel (7.5% see-through interest in Tembo Nickel Corp. once approvals and conditions are met). The second tranche of US$50 million will increase BHP’s equity stake in Kabanga Nickel to 17.8% (15% see-through interest in Tembo), thereby valuing the project at US$658 million post-money.

On satisfaction of additional conditions, BHP will secure the right to make a further investment in Kabanga Nickel subject to achieving certain agreed milestones.

The investment into Kabanga Nickel from BHP will support an acceleration in the mine’s development, including an updated Definitive Feasibility Study and support the construction plans for the hydromet refinery. These studies are expected to be completed by the end of 2022. Site and infrastructure development are already under way. The investment will also support hiring and training of local Tanzanian talent.

The current project development timeline anticipates first production in 2025. Output will ramp up to target a minimum annual production of 40,000 metric tons (mt) of nickel, 6,000 mt of copper and 3,000 mt of cobalt.