Anglo-Australian mining company BHP is returning to Africa as an investor for the first time since 2015. The largest miner on the globe announced a few days ago that it has committed to investing $100 million into Kabanga Nickel, a project to mine a colossal nickel deposit in Tanzania. This marks an interesting turnaround, as BHP had previously planned on steering away from nickel in 2014 when it decided to sell its Australia-based Nickel West project.

The investment makes Kabanga’s value come to $658 million. It comes as part of BHP’s efforts to grow its portfolio to include more commodities that are identified as critical to the clean energy transition.

BHP will start for the moment by putting $40 million into Kabanga and $10 million into Lifezone, the company that owns the technology used to process the nickel. This will give BHP an initial 8.9% stake in Kabanga, which will become 17.8% once it invests the remaining $50 million.

The solution to Elon Musk’s plea for more nickel mining

Close to the Burundi and Rwanda borders in a remote corner of Tanzania, Kabanga, unfortunately, lacks sufficient infrastructure at present. However, BHP still made a good choice with Kabanga; it is considered the biggest high-grade nickel sulphide reserve on Earth that is development-ready. According to the owner, this means it will be able to fulfill Elon Musk’s plea for miners to, in his words, “please mine more [sustainable] nickel”. Musk implored more companies to invest in nickel mining as nickel is key for producing electric vehicles, and thus necessary for the future and transition to sustainable green energy.

The commodity is one of the main elements used to make lithium-ion batteries that power electric vehicles. It is also cheaper and easier to access than cobalt, which is also often used in the production of vehicles but which manufacturers are trying to use less of.

When will Kabanga start operations?

It’s taken a long time for solid plans for mining at Kabanga to be made; for years, major global mining companies were put off by its remote site with its inaccessibility to infrastructure, and the volatile nickel prices.

However, operations at Kabanga are finally expected to begin in 2025, and the aim is for the project to produce a minimum output of 65,000 tonnes per annum.

The yearly output is predicted to be 40,000 tonnes of nickel, 6,000 tonnes of copper, and 3,000 tonnes of cobalt.

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