Lifezone Metals advances $991 million Kabanga mine and refinery project.
The project will produce 1.15 million tonnes of nickel over 22 years.
Tanzania promotes local mineral processing as part of its value-added policy.
Despite the global nickel price drop, Lifezone Metals, listed on the New York Stock Exchange, continues to advance the Kabanga project in Tanzania, its first integrated nickel operation. The project includes a mine and refinery aimed at increasing domestic value addition in the mining industry.
LME nickel futures are trading at $15,120 per tonne, down 68% from the peak of $48,000 in April 2022. Supply surpluses driven by Indonesia have led companies like BHP and First Quantum to suspend some operations in Australia. In contrast, Lifezone continues to invest in Kabanga, which will be Tanzania's first nickel refinery.
"The nickel market faces significant challenges due to Indonesia's dominance in supply, leading us to restructure the development plan for Kabanga," said CEO Chris Schowalter earlier this month.
The company is completing a final feasibility study based on the 22-year mining plan. During the first five years, mine production will be concentrated for export during the refinery construction phase. Once operational, the refinery is expected to produce 50,000 tonnes of nickel sulphate annually, along with smaller amounts of cathode copper and cobalt sulphate.
According to an update on June 2, the Kabanga mine is expected to produce 1.15 million tonnes of nickel over 22 years. With an initial investment cost of approximately $991 million for the mine and refinery, based on $8.49 per pound ($18,000 per tonne), the post-tax internal rate of return is 22.9%, and the post-tax net present value is $2.37 billion.
Lifezone emphasizes its commitment to "responsible development and long-term value creation." The Tanzanian government announced in April that new mining licenses would be linked to local processing commitments, holding a 16% stake in the Kabanga project. Lifezone Metals holds 69.7%, while BHP holds the remaining 14.3%.
The summary of the final feasibility study for the project is expected to be completed in July. The company may outline its development timeline and strategy to address ongoing nickel price weakness, particularly with new online supplies introduced in Indonesia.
Source: ecofinagency
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