Australia-based BHP has announced an investment of $50m in a development-ready nickel sulphide deposit in western Tanzania.

The company will invest $40m to speed up the development of the Kabanga Nickel project to produce battery-grade nickel, cobalt and copper.

Once the necessary approvals are in place, the investment will convert into an 8.9% equity stake in Kabanga Nickel.

BHP will make the remaining $10m investment in Lifezone, the owner of the hydrometallurgical technology that will be used to build and operate a refinery in Tanzania.

The investment will is expected to support further commercialisation of the Lifezone hydrometallurgical technology, which is said to be more cost-efficient than smelting with a lower environmental impact.

Kabanga Nickel CEO Chris Showalter said: “BHP is the ideal partner for Kabanga Nickel, bringing significant advantages and expertise that will enable us to move ahead with the project. BHP’s investment reflects the project’s strong ESG credentials and its role in improving environmental performance throughout the nickel value chain.

“In addition, BHP’s funding support of Lifezone’s hydromet technology – the future of sustainable metals processing – will drive progress towards a greener world.

“Through development of Kabanga and Lifezone hydromet, Tanzania will have a growing role in the supply of the battery metals needed to move to a global low carbon economy.”

BHP’s investment will support the Kabanga Nickel mine development, including an enhanced metallurgical drilling programme to allow update of the Definitive Feasibility Study.

It will also support the construction plans for the hydromet refinery.

First production from the Kabanga Nickel mine is expected to occur in 2025.

Once operational, production is targeted to be ramped up to a minimum annual production of 40,000 tonnes of nickel, 6,000 tonnes of copper and 3,000 tonnes of cobalt.

The project has contained in-situ nickel equivalent resources estimated at 1.86 million tonnes and an in-situ nickel equivalent grade of 3.44%1,2 .

BHP is also expected an additional investment of $50m in Kabanga Nickel, increasing its stake to 17.8% in the project.

In January last year, Kabanga Nickel signed a framework agreement with the Tanzanian government to develop the nickel project by forming a new joint venture called Tembo Mining.