3 days ago
BHP exits $2.5 billion Tanzania nickel project, partner Lifezone says
MELBOURNE, July 21 (Reuters) - BHP Group ( opens new tab has opted to sell its interest in the $2.5 billion Kabanga nickel project in Tanzania to its partner Lifezone Metals (LZM.N), opens new tab for as much as $83 million, Lifezone said.
The NYSE-listed company will acquire BHP's 17% equity interest in Kabanga Nickel Limited (KNL), the majority owner of the Kabanga Nickel Project in northwestern Tanzania, Lifezone said in a filing late on Friday.
The company issued a report on Friday that put development costs for the project at $2.49 billion. It is expected to produce around 50,000 metric tons of nickel annually once fully ramped up, a process that will take six years including construction. A final investment decision on the project is due next year.
BHP had agreed in 2022 to make an investment of as much as $100 million in the nickel mine and processing facilities if certain conditions were met.
BHP did not respond immediately to a request for comment on why it had sold its stake in the project.
The divestment comes as BHP has since shifted its view on nickel on the back of a boom in output from Indonesia in recent years. It put its Australian Nickel West operations on care and maintenance last year due to a poor outlook for nickel prices and a decision on the future of those operations is due by early 2027.
As a result the transaction, Lifezone now owns 100% of KNL, which in turn holds an 84% interest in Tembo Nickel Corporation Limited (TNCL), the Tanzanian operating company for the Kabanga Nickel Project.
The remaining 16% of TNCL is held by Tanzania's government. All existing agreements with BHP have been terminated and Lifezone has also assumed full control of 100% of the offtake from the Kabanga Nickel Project, it said.
