BHP Group exits Tanzanian nickel project amid global market uncertainty

Edited By: Safae Fathi

BHP Group has fully withdrawn from the Kabanga nickel project in northwestern Tanzania, selling its 17% equity stake to Lifezone Metals in a transaction valued at up to $83 million. The move marks a continuation of the company’s broader retreat from the global nickel market, which has been weighed down by excess supply and declining prices. Lifezone Metals, now the sole owner of Kabanga Nickel, will oversee the development of the project, in which Tanzania’s government retains a 16% interest. All previous agreements between BHP and Lifezone have been terminated as part of the acquisition.

The decision reflects BHP’s reassessment of its position in the nickel sector, following the recent suspension of its nickel operations in Western Australia. Despite having previously identified nickel as a strategic growth commodity alongside copper and potash, the company has faced sustained difficulties in maintaining profitability within its nickel business. The global market has seen a steep fall in prices, driven largely by a surge in low-cost Indonesian supply that has reshaped industry dynamics. A source close to the company noted that while BHP continues to recognize the Kabanga project as a high-quality undeveloped nickel-sulphide asset, current market conditions hinder further investment in greenfield developments.

Since its initial investment of $40 million in 2021 followed by an additional $50 million a year later BHP had positioned itself as a key stakeholder in what was projected to be a long-term, high-yield venture. Lifezone Metals estimates that the development of the Kabanga operation will require approximately $942 million in capital expenditure, with an expected output of over 900,000 metric tons of nickel across nearly two decades. As the demand for nickel in electric vehicle batteries continues to evolve, Lifezone now assumes full control over a project viewed as central to Tanzania’s ambitions to become a regional hub for battery metal production.