KABANGA, Ngara District (CU)_In late-December mining giant BHP lost a bid to acquire Canadian nickel miner Noront Resources Ltd., after a year-long bidding war with fellow Australian mining giant Wyloo Metals. As miners across the globe are looking to make an entry into the mineral-rich Ring of Fire region in east-central Canada, BHP’s defeat is seen as a major disappointment for the company which is looking to expand in commodities that will be central to the green-energy transition.
Therefore, less than a month since it bowed out of the prolonged bidding war, the BHP Group is now looking to buy a minority stake in the Kabanga Nickel project, located in the north-west of Tanzania. Nickel, which is traditionally used to make stainless steel, is now seeing a hike in demand as a key component in the manufacturing of lithium-ion batteries for electric vehicles.
A couple of years ago, BHP sold its last mining asset in Africa, which was the rights to develop an iron ore deposit in Guinea, and has since focused on its operations in Australia, Canada and Chile. Therefore, the firm’s return to Africa marks a shift in strategy, as it has mainly operated in more developed countries in the recent years.
While the Kabanga project hosts the world’s largest development-ready nickel sulphide deposit, it is also attractive owing to BHP’s plans to use a more environmentally friendly way to refine nickel, known as hydrometallurgical technology. The mining giant is expected to invest 40 million in Kabanga Nickel to take an 8.9 per cent equity stake and will raise this figure to 17.8 per cent after it makes an additional US$50 million investment. The Company will invest another US$10 million in Lifezone Limited, which owns the processing technology.
“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 spokesperson for BHP told the Financial Post via email.
