BHP Back to Africa With Tanzania Nickel Investment
BHP (ASX, LON, NYSE: BHP) has committed to invest $100 million in a huge nickel project in Tanzania, UK-based private company Kabanga Nickel said on Monday, as the world’s largest miner seeks to expand its portfolio in commodities deemed key to the green energy transition.
The move marks BHP return to Africa, where it been inactive since it spun off South32 (ASX: S32) in 2015 and comes less than a month after it bowed out of a bidding war for Noront Resources (TSX-V: NOT), which owns nickel deposits in Canada.
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Going back to Africa aligns with chief executive Mike Henry’s strategy of expanding the search for key metals into “tougher jurisdictions”, as the company has traditionally focused on less risky mining jurisdictions such as Australia, Chile and Canada.
BHP will initially invest $40 million in Kabanga Nickel and $10 million in Lifezone, which owns the processing technology. The investment will give the Melbourne-based mining giant an 8.9% stake in Kabanga, which it can bump to 17.8% after it makes an additional $50 million investment.
BHP’s purchase of a stake in Kabanga values the project at $658 million. It marks a sharp strategy turnaround, as the company had planned to exit the nickel business to focus on other commodities, putting its Nickel West unit in Australia up for sale in 2014.
The company reversed its decision in 2019 and is now expanding those operations as it has placed nickel at the core of its business.
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