Tanzanian government forms JV with UK miner to develop nickel project

UK miner Kabanga Nickel has signed a framework agreement with the government of Tanzania to develop the world’s largest battery-grade nickel sulphide deposit in the country’s Northwest.

The two parties have created a joint venture company called Tembo Nickel Corp, with Kabanga assuming a leading 84% stake. Tanzania owns the remaining 16% – the government’s usual stake in mining projects.

Economic benefits from the Kabanga nickel project – formerly owned by Barrick Gold and Glencore – will be shared equally between the two shareholders, the parties said in the statement.

President John Magufuli revoked Barrick and Glencore’s licence for the project back in 2018, when the Tanzanian government was in the process of overhauling the mining sector’s fiscal and regulatory regime in order to extract higher state revenues from the space.

The Kabanga project hosts an in situ mineral resource of 58 million tonnes (Mt) at 2.62% Ni, containing more than 1.52 Mt of nickel, a key ingredient for batteries inside electric vehicles (EVs). Kabanga also said that the 30-year mine life project contains significant amounts of cobalt and copper.

“The project aims to develop the country’s vision of adding value to all minerals and to expand refineries beyond Kabanga that will make Tanzania a regional and central hub for East and central Africa that will process minerals in Africa,” said Kabanga’s vice chairman Chris von Christierson.

Fitch Solutions has forecasted that nickel mine production will grow by 8.3% this year, after Elon Musk announced a new high nickel cathode for Tesla’s next generation of EVs.

@RGNonline