Kabanga Nickel shines the torch on Tanzania new mining frontiers

Tanzania will be among the key players in the net zero area, as the project to develop nickel deposits in Kabanga, expected to employ advanced and more cost-efficient tech, the hydrometallurical technologies that is also said to have lower environmental impacts.

The Kabanga Nickel Project which has recently secured $100 million investment from resource company BHP, has allocated $10 million to acquire the hydromet tech to ensure that finished Class 1 battery grade nickel, copper and cobalt will be produced in the country.

The Citizen’s Josephine Christopher, held a Q&A interview with the Kabanga Nickel’s Chief Executive Officer Chris Showalter.

Give us a quick up to date on your operation since the project recently secured a $100 million investment?

We have moved fast since Kabanga Nickel took over the project in January last year. We have been working closely with the government to ensure that we have all the right mining and refining licences and the proper environmental permits.

We have also been working hard with the community to agree their needs, to agree resettlement proposals where necessary and tocreate the right community initiatives to ensure local people also derive benefits from the project.

This has now brought us to a stage where it has attracted international investment by the world’s leading mining company – BHP.

We are very pleased BHP decided to invest in Kabanga. To recap the investment, an initial $40 million will be invested into Kabanga together with $10 million into Lifezone – the technology company owner of the hydromet refining technology to be applied at the project.

The initial investment will be received very shortly so this work can be accelerated.

The further $50 million investment earmarked for Kabanga Nickel is agreed in principle and will be secured once a number of conditions and milestones are met.

With regards to the development itself, we have been working on concluding the final studies of the geology and we have a drill rig on site at present completing a confirmatory drill program specifically for the inputs to the hydromet refinery.

How will Nickel mining raise Tanzanian image on the global mining industry?

We believe that the nickel we produce in Tanzania will be in even greater demand because of its environmental credentials. Nickel from Kabanga will be refined using hydrometallugy, rather than smelting, which reduces emissions by around 80 percent. It will also be refined in Tanzania rather than being shipped around the world, reducing emissions further.

Car and battery makers are under pressure to reduce carbon emissions both in their own operations as well as their supply chains, so they are likely to prefer our nickel than that produced by dirtier methods in places like Russia.

It shows the role African countries can play in contributing to the net zero economy. This is relevant as the next climate summit, COP27, will be hosted by an African country (in Sharm el-Sheikh, Egypt).

Our project represents a private-public initiative, with not only BHP but also the Government of Tanzania as strategic partners. We believe Tanzania can be a key player in the global net zero arena.

Aside from the macro economics, Tanzania is a welcome place for investment – which is demonstrated through BHP’s investment and show’s Tanzania is open for business.

Being in a new area of mining, what is the company’s strategy to meet the legal requirement on local content?

Both BHP and Kabanga are committed to providing training and development to local people and to hire as much as possible from the local community. We also believe in hiring local contractors and using local suppliers wherever we can.

Tanzania has a long history of mining and the skills, knowledge and expertise, which we see as a positive for the development of the Kabanga project. Where there is a shortage of local expertise, we are determined to provide all the support and education necessary to create a new generation of highly skilled workers in the mining sector.

Explain briefly the shareholding structure of the company?

The operational company is Tembo Nickel, which is 84 percent owned by Kabanga and 16 percent owned by the government of Tanzania. This is the partnership vehicle for equitable sharing of value created, as the Framework Agreement sets out.

Kabanga Nickel itself is currently a private-held UK company, owned primarily by the Board and Management. Should BHP make its full currently planned investment in Kabanga, it would take a near 18 percent stake in the company, equivalent to 15 percent in Tembo.

What is the realistic expected date of the first export from the mine and what value would         that represent?       

We expect mining to commence in 2025 [with the first exports taking place in the months that follow]. It is too early to give a figure on the value that that would bring, but it has always been our intention to use our model to ensure as great a share of that value remains in Tanzania as possible.

Over the next 12-18 months we will be updating the development plans and have more of a definitive timeline.

What should communities surrounding the mine expect from your investment? As well as the whole economy?

The Kabanga project aims to provide the highest standards of community support in the mine area in Ngara District and the hydromet refinery in nearby Kahama. As I noted, we have been doing a lot of work in understanding the community needs so that we can make sure all our initiatives and programmes provide benefits to the communities around our operations.