(Reuters) – BHP Group Ltd would make an investment of $40 million to develop a nickel project in Tanzania, Kabanga Nickel said on Monday, and $10 million for a cleaner production technology, as the global miner seeks to reduce its carbon footprint.
BHP will invest $40 million in privately-owned Kabanga Nickel, which is developing the nickel project, and $10 million in Lifezone Ltd, whose ore refining technology is considered more cost-efficient and environmentally-friendly.
BHP’s investment in UK-based Kabanga will give it an 8.9% stake once approvals and conditions are met, Kabanga said in a statement. BHP has the option to invest a further $50 million to raise its stake to 17.8%, which would then value the project at $658 million.
The investment comes as global miners race to reduce emissions from their projects and gather supply of metals such as nickel, which are a key component of electric vehicles.
“This investment secures access to a world class nickel sulphide resource and is aligned with BHP’s strategy to capture opportunities in future-facing commodities,” a BHP spokesperson said in an emailed statement.
Kabanga expects first production in 2025, targeting a minimum annual nickel equivalent production of 65,000 tonnes. Output will be ramped up to target a minimum annual production of 40,000 tonnes of nickel, 6,000 tonnes of copper and 3,000 tonnes of cobalt, the company said.
(Reporting by Tejaswi Marthi in Bengaluru; Editing by Rashmi Aich)
