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Kabanga, Tanzania to develop world’s largest nickel deposit - MINING.COM
Credit: Cecilia Jamasmie | January 19, 2021 | 6:49 am Base Metals Exploration Markets Africa Europe Nickel
British miner Kabanga Nickel, formerly known as LZ Nickel, has inked a framework agreement with the government of Tanzania to develop the world’s largest battery-grade nickel sulphide deposit, in the country’s northwestern.
As part of the deal, the parties have created a joint company called Tembo Nickel Corp., which will mine, process and refine class 1 nickel with cobalt and copper co-products.
Kabanga Nickel is the new entity’s majority owner with an 84% stake. Tanzania owns the remaining 16%, which is the government’s usual stake in all of the country’s mining projects.
Economic benefits from the Kabanga nickel project, formerly owned by Barrick Gold (TSX: ABX) (NYSE: GOLD) and Glencore (LON: GLEN), will be shared equally between the two shareholders, the parties said in the statement.
Tanzania, Africa’s fourth-largest gold producer, has sought in recent years higher revenues from its vast mineral resources by overhauling the fiscal and regulatory regime of its mining sector.
Tanzania and Kabanga Nickel strike deal to develop nickel project
Credit: Nuzulack DausenDAR ES SALAAM (Reuters) - Tanzania and UK-based mining firm Kabanga Nickel Limited signed a framework agreement on Tuesday to jointly develop the Kabanga nickel project formerly owned by Barrick Gold and Glencore.
Foreign minister Palamagamba Kabudi said during a signing ceremony in Bukoba that the government would own a 16% undiluted free-carried interest in the nickel project through a new joint venture company, Tembo Nickel Corporation, 84% owned by Kabanga Nickel.
By law, Tanzania’s government gets a 16% stake in all mining projects in the country.
Nickel is a key electric car battery material and Kabanga - in Tanzania’s northwest - is the world’s largest development-ready, high-grade nickel sulfide deposit, according to Kabanga Nickel. It is estimated to contain more than 1.52 million tonnes of nickel.
Barrick Gold and Glencore lost the nickel project in 2018 when Tanzanian President John Magufuli’s administration revoked their retention licence along with 10 others as part of new mining laws and regulations. Kabanga Nickel, which was previously called LZ Nickel, said it has agreed with Barrick and Glencore to acquire all the project data and information from them, including a 2014 draft feasibility study report and subsequent updates.
As well as starting the mine, Kabudi said Kabanga Nickel is required to build a nickel smelter which can also smelt other metals such copper and gold.
Kabanga Nickel said Tembo would produce Class 1 nickel and cobalt products, and LME Grade A copper cathode. The mine is estimated to contain more than 100,000 tonnes of cobalt - also used in batteries.
Barrick and Glencore lost the nickel project in 2018, when President John Magufuli’s administration revoked their retention licence, along with 10 others.
The move followed the suspension of new mining permits and the passing of two bills giving Dar es Salaam the right to renegotiate or revoke existing licences. The Kabanga project hosts an in situ mineral resource of 58 million tonnes at 2.62% Ni containing more than 1.52 million tonnes (3.30 billion pounds) of nickel. It also has significant amounts of cobalt and copper with a 30-year mine life.
The UK High Commissioner to Tanzania was there to witness what Tanzania can offer to the world and support the British firm.
