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BHP investing US$40M in Kabanga Nickel, US$10 in Lifezone; 2nd tranche of $50M slated for Kabanga

BHP, a world leading resources company, has invested US$40 million into Kabanga Nickel in Tanzania. The money will be used to accelerate the development of the Kabanga Nickel Project—the world’s largest development-ready nickel sulfide deposit.



In parallel, BHP has invested US$10 million into Lifezone Limited to advance the roll-out of its patented hydrometallurgical (hydromet) 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, Kabanga Nickel said.

Future investment tranches in Kabanga Nickel have been agreed subject to certain conditions, including a second tranche of US$50 million and the right for BHP to make a further investment in Kabanga Nickel subject to achieving certain agreed milestones.

We are delighted to announce this partnership with BHP. It 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. BHP’s investment reflects the project’s strong ESG credentials and its role in improving environmental performance throughout the nickel value chain.

In addition, BHP’s funding support of Lifezone’s hydromet technology – the future of sustainable metals processing – will drive progress towards a greener world. Through development of Kabanga and Lifezone hydromet, Tanzania will have a growing role in the supply of the battery metals needed to move to a global low-carbon economy.

—Chris Showalter, Kabanga Nickel CEO

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 Corporation once approvals and conditions are met. Once invested and on conversion the second tranche of US$50 million will increase BHP’s equity stake in Kabanga Nickel to 17.8% (15.0% 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.

Investment in Lifezone. In parallel to the Kabanga Nickel US$40 investment, BHP will invest US$10 million into Lifezone Limited. Lifezone is the owner of the hydrometallurgical technology that will be used to build and operate a refinery in Tanzania. Lifezone’s hydromet technology provides a greener, lower emission and higher margin product and will allow full beneficiation of metals in-country.

Use of proceeds. The investment into Kabanga Nickel from BHP will support an acceleration in the mine’s development, including an enhanced metallurgical drilling program to enable update of the 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 is already underway. The investment will also support hiring and training of local Tanzanian talent.

The investment into Lifezone allows for new patent applications as well as R&D work that will further commercialize the Lifezone hydrometallurgical technology. Lifezone currently has patents granted in more than 150 countries. Hydrometallurgy, already in operation at various operations around the world, is becoming increasingly attractive to produce base and precious metals. Crucially, it has lower energy consumption and a smaller environmental footprint.

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

ESG commitment to supply clean nickel. With the growing demand for batteries used in electric vehicles, the World Economic Forum estimates that demand for high-purity Class 1 nickel will increase by 24-fold between 2018 and 2030.

Kabanga is the world’s largest development-ready high grade nickel sulphide, unmatched in scale and grade, with more than 30 years life of mine and further exploration upside. Previous Resource Estimates suggest the deposit contains 58 million tonnes of ore containing 1.52 million tonnes of nickel, alongside significant amounts of copper and cobalt.

The quality of the ore body and its geology means the project will be a cradle-to-gate mining operation producing Class 1 nickel, copper and cobalt refined metals in Tanzania ready for use by OEMs and battery makers without any further processing.

Kabanga Nickel also intends cut the emissions footprint of the development by using hydrometallurgy technology to process the concentrated ore, rather than traditional smelting. This should reduce Kabanga’s energy use and emissions significantly. The process will also eliminate the need to export concentrate to overseas smelters and refineries, thus reducing capital and operating costs with low environmental impact, while maximizing value within Tanzania.

Hydromet. Hydrometallurgical processing is an aqueous processing technology that selectively targets the valuable metals in a concentrate for extraction at ~200°C.

Metals are initially leached out of concentrate feed material through pressure oxidation—an emissions-free process. Base metal cathodes, briquettes, powders or battery precursor feeds are sequentially produced through selective Solvent Extraction and Electrowinning (SX/EW) processing. Following subsequent leaching, precious metals are further refined.


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