BHP Sells Kabanga Nickel Stake to Lifezone Metals for $83M Amid Shifting Market Outlook
BHP Group has agreed to sell its stake in the $2.5 billion Kabanga Nickel Project in Tanzania to its partner, Lifezone Metals, for up to $83 million, according to a company filing from Lifezone on Friday.
Lifezone, listed on the New York Stock Exchange, will acquire BHP’s 17% equity interest in Kabanga Nickel Limited (KNL), the majority owner of the Kabanga Nickel Project located in northwestern Tanzania.
A newly released report from Lifezone estimates development costs at $2.49 billion. Once fully operational, the project is expected to produce approximately 50,000 metric tons of nickel annually.
The ramp-up period, including construction, is projected to take six years. A final investment decision (FID) is anticipated in 2026.
BHP initially agreed in 2022 to invest up to $100 million in the project, contingent on specific conditions being met.
Although BHP still views Kabanga as one of the most promising undeveloped nickel sulphide deposits globally, a source familiar with the matter said that a weakened nickel market outlook and BHP’s capital allocation priorities have made greenfield investments in nickel more difficult.
A spokesperson for BHP declined to comment.
BHP’s reassessment of the nickel sector comes amid a surge in production from Indonesia, which has reshaped global supply dynamics.
In 2024, BHP placed its Australian Nickel West operations into care and maintenance, citing declining nickel prices. A decision on the future of those operations is expected by early 2027.
Following the transaction, Lifezone Metals now owns 100% of KNL, which in turn holds an 84% interest in Tembo Nickel Corporation Limited (TNCL), the Tanzanian operating company for the project. The Tanzanian government retains a 16% stake in TNCL.
As part of the deal, all previous agreements with BHP have been terminated. Lifezone has also assumed full control of 100% of the project’s nickel offtake, the company confirmed.
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