Led by Canadian executive Mike Henry, BHP Group moves to invest $100 million in Tanzanian nickel project

BHP Group, a publicly-listed company owned by the Anglo-Australian multinational mining resources group, is set to invest $100 million in one of Kabanga’s nickel projects in Tanzania, as the demand for electric vehicles triggers a surge in the demand for the metal used in batteries.

According to Financial Times, BHP Group will invest $40 million to accelerate the development of the Kabanga deposit and a further $10 million in the project’s hydrometallurgy refining process.

The behemoth also revealed that, subject to certain conditions and targets being achieved, it will invest an additional $50 million in the project in a deal that will see it take up an 18-percent stake in Kabanga Nickel. The deal will give the project a $650-million valuation.

BHP Group is one of the world’s largest mining groups. The move, which aligns with the strategy of CEO Mike Henry, will deepen the group’s exposure to “future-facing commodities” as it moves to secure access to a world-class nickel sulfide resource.

Earlier, Henry stated that new investments in these commodities will be a priority, as they will protect the company and grow value over the long term.

He further noted that the move toward decarbonization, electrification, diet, land use and population trends will all drive up the demand for copper, nickel and potash in the mid- to long-term.

The decision to invest $100 million in Kabanga Nickel comes nearly three years after the mining behemoth sold its last Africa asset in 2019 to focus on less risky mining jurisdictions such as Australia, Chile and Canada, which have been developed extensively.

The Kabanga Nickel project is regarded as the world’s largest development-ready, high-grade nickel sulfide deposit, which contains nickel equivalent resources assessed at 1.86 million tonnes.

At full capacity, the project will produce 60,000 tonnes per year of battery-grade nickel during the estimated 30-plus years of the mine’s life. In addition, it will also produce 4,000 tonnes per year of cobalt, another battery metal.

As of press time, Jan. 10, shares in the behemoth were trading at $62.53, giving the group a $158.25-billion market capitalization.

At the current price, the market value of Henry’s beneficial 0.01-percent stake in the group is $22.8 million.