BHP Group has agreed to divest its entire 17 per cent equity interest in the US$2.5 billion Kabanga Nickel Project in northwestern Tanzania to its project partner, Lifezone Metals, consolidating Lifezone’s control over one of the world’s most significant untapped sources of battery-grade nickel.
Lifezone Metals, listed on the NYSE, finalised the transaction through a deferred payment structure with a maximum consideration of US$83 million.
The agreement terminated all previous arrangements with BHP, including off-take rights, granting Lifezone complete autonomy over Kabanga Nickel Limited (KNL), the project’s main holding company.
KNL, in turn, owns an 84 per cent stake in Tembo Nickel Corporation Limited (TNCL), Kabanga’s Tanzanian operating entity, while the Government of Tanzania retains a 16 per cent interest.
The acquisition arrives as Lifezone advances Kabanga toward a final investment decision, expected in 2026.
Once operational, the project is forecast to produce approximately 50,000 metric tonnes of nickel annually, supporting the fast-growing demand for critical minerals driven by electric vehicle and clean energy industries.
The total development cost is estimated at US$2.49 billion, with a six-year timeline for full ramp-up, inclusive of the construction period.
BHP, which initially committed up to US$100 million to the Kabanga project in 2022, is withdrawing amid a deteriorating market outlook for nickel.
A global supply surge, particularly from Indonesia, has weighed heavily on prices, prompting major producers to reconsider capital-intensive greenfield developments.
Last year, the mining giant placed its Australian Nickel West operations on care and maintenance, citing persistently weak market conditions.
While a BHP spokesperson declined comment, an informed source indicated that the company still regards Kabanga as a leading undeveloped nickel sulphide project.
Nonetheless, BHP’s strategic focus has shifted, emphasising disciplined capital allocation and portfolio realignment, including recent considerations to spin off other non-core assets.
For Lifezone Metals, the acquisition sets the stage for streamlined management of the Kabanga project.
Chair Keith Liddell stated: “This transaction to own 100 per cent of Kabanga Nickel Limited allows Lifezone to fully align our technical, commercial, and ESG strategy as we advance Kabanga toward the Final Investment Decision.
CEO Chris Showalter praised BHP’s supportive role in advancing the project and reaffirmed Lifezone’s commitment to delivering a “world-class, low-cost nickel project” with benefits for all stakeholders, including the Tanzanian government and local communities.
Lifezone is currently working with Standard Chartered Bank to secure short-term and long-term financing for the next phases of development, positioning Kabanga as a future cornerstone of sustainable nickel supply.
