- As part of its green-energy transition strategy and expansion plan, BHP Group proposes to buy a minority stake in a Tanzanian nickel project, Kabanga Nickel Ltd.
- Nickel, traditionally used to make stainless steel, has gained importance lately as a key component in lithium-ion batteries, to reduce the use of expensive cobalt, which has a less transparent supply chain.
- BHP has identified Nickel as a priority commodity with immense scope in future as the company shifts away from fossil fuels.
As part of its green-energy transition strategy and expansion plan, BHP Group proposes to buy a minority stake in a Tanzanian nickel project, Kabanga Nickel Ltd. Nickel, traditionally used to make stainless steel, has gained importance as a key component in lithium-ion batteries, to reduce the use of expensive cobalt, which has a less transparent supply chain. BHP has identified Nickel as a priority commodity with immense scope in futue as the company shifts away from fossil fuels.
BHP has operated mainly in more developed countries in recent years. The company sold its last mining asset in Africa — an iron ore deposit in Guinea — in 2019 to focus on its operations in Australia, Canada and Chile. A return to Africa marks reflects a shift in its business strategy. Last month it relinquished its bidding for Noront Resources Ltd., which owns nickel deposits in Canada.
Kabanga Tanzania has a huge nickel deposit and the company plans to use hydrometallurgical technology, which allows the refining of nickel in a more environmentally friendly way. The Company in a statement said that the investment gives access to a world-class nickel sulphide resource and is aligned with BHP’s strategy to capture opportunities in future-facing commodities .The proposed plan of BHP is to invest US$40 million in Kabanga Nickel and US$10 million in Lifezone, which owns the processing technology. Initially, it will take a 8.9 per cent equity stake in Kabanga Nickel and raise its stake to 17.8 per cent after it makes an additional US$50 million investment in the project currently valued at US$658 million. Kabanga plans to start operations by 2025, producing about 40,000 tons of nickel, 6,000 tons of copper and 3,000 tons of cobalt.
