Lifezone Metals has finalised a definitive agreement with BHP Billiton (UK) DDS to acquire its 17% equity interest in Kabanga Nickel Limited (KNL), which has majority ownership of the Kabanga nickel project in Tanzania.
With this deal, Lifezone gains full ownership of KNL, which has an 84% stake in Tembo Nickel Corporation Limited (TNCL), the Tanzanian operating company for the project.
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The Government of Tanzania owns the remaining 16% of TNCL.
Lifezone has also gained complete control of 100% of the offtake from the nickel project.
Lifezone acquired the Kabanga project in 2021 and secured a licence to operate a multi-metal processing facility for nickel, copper and cobalt for the project in March last year.
The deal terms include a $10m (£7.43m) fixed cash payment post-final investment decision (FID), a second deferred cash payment linked to Lifezone’s share price after first commercial production, and a total consideration cap of $83m, reduced to $75m if independent verification via a Resettlement Action Plan Trigger Event occurs.
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By GlobalDataBHP has agreed to a 12-month lock-up period on its Lifezone shares and must offer any intended share sales to Lifezone first.
Lifezone CEO Chris Showalter said: “This marks a significant milestone for Lifezone as we consolidate ownership of the Kabanga nickel project. BHP has been a supportive and value-adding partner whose investment has contributed to advancing the project, and their exit coincides with the project’s transition into its next stage of development.
“Our focus remains on delivering a world-class, low-cost nickel project that benefits all stakeholders, including the Government of Tanzania and local communities.”
Lifezone has engaged Standard Chartered Bank for short-term financing and strategic advisory services to support early construction works and progress towards the FID.
Société Générale is advising on project financing, with interest from potential lenders including export credit agencies.
Lifezone founder and chair Keith Liddell said: “This transaction to own 100% of Kabanga Nickel Limited allows Lifezone to fully align our technical, commercial and ESG [environmental, social and governance] strategy as we advance Kabanga toward the final investment decision. We are committed to delivering the project responsibly and to creation of long-term value for all our stakeholders.”
Furthermore, Lifezone has filed the Kabanga project feasibility study technical report summary, confirming its economic potential.
The study establishes initial mineral reserves for the premier nickel sulphide project.
The project has proven and probable mineral reserves totalling 52.2 million tonnes (mt), with Lifezone’s share at 43.9mt, containing 1.98% nickel, 0.27% copper and 0.15% cobalt.
With an 18-year operational lifespan, the mine is expected to maintain an annual production rate of 3.4mt.
Overall production is projected to yield 902,000 tonnes (t) of nickel, 134,000t of copper and 69,000t of cobalt in intermediate product form across the mine’s lifetime.
Showalter added: “With declared mineral reserves, robust economics and path to final investment decision targeted for 2026, we are advancing a project that not only delivers strategic value to the critical metals supply chain but also creates long-term economic benefits for Tanzanians.”
