• Lifezone Metals advances $991 million Kabanga mine and refinery project
• Project to produce 1.15 million tonnes of nickel over 22 years
• Tanzania pushes local mineral processing as part of value-added policy

Lifezone Metals, listed on the New York Stock Exchange, is moving forward with the Kabanga project in Tanzania—its first integrated nickel operation—despite falling global nickel prices. The project includes a mine and refinery, aiming to boost domestic value addition in the mining sector.

Nickel futures are currently trading at $15,120 per ton on the London Metal Exchange, down 68% from a 2022 peak of $48,000. Oversupply, largely driven by Indonesia, has led firms like BHP and First Quantum to suspend some operations in Australia. In contrast, Lifezone is continuing its investment in Kabanga, which will house Tanzania’s first nickel refinery.

“The nickel market has faced significant challenges due to Indonesia’s supply domination impacting prices, causing us to reengineer our Kabanga development plans,” said Lifezone CEO Chris Showalter earlier this month.

The company is finalizing a definitive feasibility study based on a 22-year mining plan. During the first five years, the mine’s output will be exported in concentrated form while the refinery is under construction. Once operational, the refinery is expected to produce 50,000 tonnes of nickel sulfate per year, along with smaller volumes of copper cathodes and cobalt sulfate.

According to Lifezone’s June 2 update, the Kabanga mine is projected to yield 1.15 million tonnes of nickel over 22 years. The initial investment cost for the mine and refinery is estimated at $991 million, based on a nickel price of $8.49 per pound (about $18,000 per ton). The after-tax internal rate of return is 22.9%, and the post-tax net present value is $2.37 billion.

Lifezone has emphasized its commitment to “responsible development and long-term value creation.” Tanzania’s government, which announced in April 2024 that new mining licenses would be tied to local processing commitments, holds a 16% stake in the Kabanga project. Lifezone Metals owns 69.7%, and BHP holds the remaining 14.3%.

A summary of the project’s definitive feasibility study is expected in July. The company will likely detail its development timeline and strategies to navigate the continued softness in nickel prices, especially as Indonesia brings new supply online.