BHP Group has invested $40 million in a Tanzania nickel project, UK-based private company Kabanga Nickel said on Monday, the first new bet by the world's biggest miner in Africa in years.
BHP has not been active in Africa since it spun off South32 in 2015, but CEO Mike Henry recently signalled a new willingness to venture into "tougher jurisdictions".
Kabanga, which expects to start producing in 2025, aims for minimum annual output of 40,000 tonnes of nickel, 6,000 tonnes of copper and 3,000 tonnes of cobalt. Demand for nickel, a key component in electric vehicle batteries is projected to rise.
"This investment secures access to a world class nickel sulphide resource and is aligned with BHP's strategy to capture opportunities in future-facing commodities," a BHP spokesperson said.
BHP last month lost out to billionaire Andrew Forrest's Wyloo Metals in a race to buy Canadian nickel miner Noront Resources Ltd. read more
Kabanga said BHP's investment will accelerate the mine's development, with a definitive feasibility study and construction plans for a refinery to be completed by the end of this year.
BHP also invested $10 million into hydrometallurgical technology firm Lifezone Limited. Kabanga said the hydromet technology, which it will use in its refinery, is a greener way to produce metal than energy-intensive smelting.
BHP's investment in Kabanga will give it an 8.9 percent stake once conditions are met, Kabanga said in a statement. BHP plans to invest a further $50 million which would increase its stake to 17.8 percent, valuing the project at $658 million.
Kabanga's plan to produce metal in-country dovetails with Tanzania's ambition to get more value out of its minerals. Mines minister Doto Biteko said Tanzania aims to become "an important hub for critical decarbonisation minerals".