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BHP To Make A $50 Million Investment In Tanzania’s Kabanga Nickel Mine

The transition to electric mobility is well underway. 2021 saw plug-in vehicles achieving record market shares in major markets. The Tesla Model 3 was the 2nd best-selling car (of any kind) in the UK  in 2021. 190,727 battery-electric EVs were sold in 2021 in the UK (11.6% of the total market). More battery-electric EVs were registered in the UK than in the previous 5 years combined! In France, plug-in vehicle share for 2021 was 18.3% (9.8% battery-electric vehicles). In Germany, 26% of new vehicle sales were for plugin vehicles in 2021. In China, electric vehicle sales growth is sparking big change. Strong sales of electric and plug-in hybrid cars accounted for 15% of overall passenger-car sales in 2021.

In 2022, there will be more electric vehicle models on the market than ever before, giving consumers more options to choose from. Sales for this year should set more records. As demand for EVs continues to soar, there will be an urgent need for players across the entire value chain to scale up. One of the most important areas is the traction battery industry. This means there will be an ever growing demand for the all-important battery materials and minerals.

Elon Musk highlighted the importance of one of these important resources, nickel, when he said “I’d just like to re-emphasize, any mining companies out there, please mine more nickel,” during a Tesla quarterly conference call. “Wherever you are in the world, please mine more nickel and … go for efficiency, obviously environmentally-friendly nickel mining at high volume. Tesla will give you a giant contract for a long period of time, if you mine nickel efficiently and in an environmentally sensitive way.”

BHP, the Australia-headquartered multinational firm, is one of the companies heeding the call to accelerate the mining of nickel and extending its reach by making an initial $50 million investment in Kabanga Nickel (northwestern Tanzania) and Lifezone, with further investments to be agreed.

Kabanga Nickel says in a  press statement:

Kabanga is the largest development-ready nickel sulphide deposit in the world. Located in western Tanzania, it has contained in-situ nickel equivalent resources estimated at 1.86 million tonnes and an in-situ nickel equivalent grade of 3.44%.

Project timeline anticipates first production in 2025, targeting minimum annual nickel equivalent production of 65,000 tonnes, with 30+ years life of mine and exploration upside potential.

US$40 million investment from BHP, a world leading resources company, to accelerate development of the Kabanga Nickel Project to produce Class 1 battery-grade nickel, cobalt and copper.

Further US$10 million investment from BHP to progress Lifezone’s low-carbon hydrometallurgical processing technology which is more cost-efficient than smelting and has a significantly lower environmental impact.

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 further investment subject to achieving certain agreed milestones.

Full beneficiation of battery grade metals without smelting will be achieved in Tanzania. The Government of Tanzania has a 16% interest through local partnership entity, Tembo Nickel Corporation, Kabanga Nickel Ltd (UK) holds the balance.

Kabanga Nickel Limited (“Kabanga Nickel”) is a UK registered private company. Chris Showalter, Kabanga Nickel CEO, said: “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 decarbonisation 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.”

Tanzania is committed to become a significant producer of responsible and sustainable metals to supply the increasing global demand to facilitate the move to a low carbon economy. The Government of Tanzania is an important partner in the development of the integrated Kabanga project. In her address at the COP26 Summit in Glasgow last November, President Samia Suluhu Hassan stressed the need for developed countries to help the African continent with the challenges of climate change. The partnership in Kabanga with the government and the backing of BHP is an example of how this can be achieved.

The Honorable Doto Biteko, Minister of Minerals, said: “Tanzania has a vision to become an important hub for critical decarbonization minerals. I am pleased that Kabanga Nickel Limited recognizes this potential and has invested in our future. 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.”

It is good to see such projects on the African continent. Several African states are blessed with a lot of these important resources. South Africa, for example, has most of the world’s known manganese. Mozambique and  Zimbabwe have natural graphite resources. Lithium, copper, iron ore, and several other important resources are also available.

Perhaps soon we will start to see investments into actual battery gigafactories on the continent as well. Morocco is looking to scale up its automobile manufacturing industry. The South African motor vehicle manufacturing industry is one of the key pillars of the South African economy. Several other African countries, such as Ghana, Kenya, Uganda, and Nigeria are also looking to ramp up their assembly and manufacturing plants to drive the industrialization agenda as well as unlock much needed employment opportunities. As the continent is home to a lot of these important battery materials and minerals, a lot of focus should be placed on how these nations can leapfrog into the EV age, and also how they can get maximum value from the battery manufacturing value chain rather than just shipping the semi-processed materials.

 

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Remeredzai Joseph Kuhudzai has been fascinated with batteries since he was in primary school. As part of his High School Physics class he had to choose an elective course. He picked the renewable energy course and he has been hooked ever since. At university he continued to explore materials with applications in the energy space and ending up doing a PhD involving the study of radiation damage in High Temperature Gas Cooled Nuclear Reactors. He has since transitioned to work in the Solar and Storage industry and his love for batteries has driven him to obsess about electric vehicles.

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