Kabanga Nickel 'not waiting' to complete feasibility, expects surging demand: CEO

Kabanga Nickel is accelerating work on its "development-ready" nickel sulfide deposit in western Tanzania, now planned to start production Q4 2025 or Q1 2026 to coincide with an "inflection point" foreseen in electric vehicle manufacturing, according to the UK-registered private company's CEO.

The project was sold by previous owners Barrick Gold and Glencore to the current owners around two years ago, with the Tanzanian government also taking a 16% stake and agreeing a 6% mineral royalty package.

Already fully licensed, Kabanga Nickel is now updating an existing bankable feasibility study from 2015, CEO Chris Showalter said. However, management doesn't plan to wait another 12-14 months to complete the update, due to the favorable market prospects for the battery-grade nickel that the project will produce for EV batteries manufacture, he added.

"We're not waiting for the feasibility study to complete before proceeding [with construction]," Showalter said in an interview with S&P Global Commodity Insights. "We have sufficient confidence in the existing feasibility study, and investment to allow procedures to continue."

The project's planned start-up in 2025-26 should coincide "with a massive increase in EVs demand," he said, noting that Volkswagen is reported to have "sold out" of EVs for the European and US markets for the rest of this year due to surging demand.

According to a January statement, BHP has agreed to invest $100 million in the project – with an initial $50 million and $50 million later this year, provided certain conditions are met. In turn, the mining major will acquire equity in the nickel mining and processing company. Of the initial tranche, $40 million has been invested in Kabanga Nickel and $10 million in Lifezone, which holds patents for the environmentally friendly hydrometallurgical process that will allow Kabanga to produce what Showalter describes as "clean" nickel, in the absence of a definition of "green" nickel.

The total investment required in Kabanga Nickel is put at $1.3 billion, including $950 million in the mine and $350 million in the hydrometallurgical plant.

The project's refined product output is expected to be some 48,000 mt/year of nickel; 7,000-8,000 mt/year of copper and 4,000 mt/year cobalt, in cathode or rounds form, produced to LBMA 99.9% purity standards.

Due to the use of hydrometallurgy, CO2 equivalent emissions per mt of nickel produced at Kabanga will be 4-5 mt, making this one of the world's lowest nickel production carbon footprints, according to Showalter.

Offtake 'competition'

A "competition process" will be run at a later date for offtake by battery manufacturers, with carmakers and traders having already shown interest, Showalter said. No discussions have yet taken place for the potential setting up of a local battery precursors plant, although this could potentially be a "next step," he said.

Kabanga Nickel, with a 33-year mine life at the production levels currently foreseen, is a "scalable" project whose useful life could be extended or production levels increased due to the high-grade nature of the deposit and exploration programs, Showalter said.

Regional exploration, potential metals hub

Due to the outstanding opportunities, Kabanga Nickel's developers are moreover already extending exploration activities into six contiguous areas in the region's mineral-rich Kibaran complex, Showalter said. The developers expect to be able to help create an east African mineral producing and processing hub based on hydrometallurgy, using LifeZone technology, he said.

The Kibaran nickel mineral complex, said to be one of the most important worldwide, is a geological belt extending through Tanzania to Rwanda, Burundi and the Democratic Republic of Congo. Discussions have already taken place in the region about the possibility of establishing a mineral processing hub for the use of various companies and countries, according to Showalter.

Tanzania's enlarged hydroelectric power capacity – with the recent coming on stream of the Rusumo dam and a grid expansion, as well as planned expansion of the rail network – should favor the development of the regional mining industry, Showalter indicated. Tanzania, whose government is now seen favorable to mineral development, including by foreign investors, has reserves of gold, copper, cobalt and graphite as well as nickel.

London Metal Exchange cash nickel prices closed at $30,200/mt May 5, down 0.61% on the day. Used in stainless steel and battery manufacturing, the metal started the year with a price of $20,925/mt.