• Lifezone Metals will invest $942M in Tanzania’s Kabanga nickel project over 18 years.
• Project targets $14.1B revenue with a 4.5-year payback despite weak nickel prices.
• Tanzania holds 16% stake, expecting $3.6B in taxes and royalties.

U.S. mining company Lifezone Metals now plans to invest $942 million to develop the Kabanga nickel project in Tanzania. This updated figure, included in the feasibility study summary published Friday, July 18, represents a reduction of about 5% from the initial projection of $991 million.

The $942 million investment covers all pre-production costs for the future mine and its dedicated refinery. The Kabanga project is expected to produce a total of 902,000 tons of nickel over an 18-year lifespan. It will also yield 134,000 tons of copper and 69,000 tons of cobalt annually as by-products.

Lifezone Metals anticipates generating $14.1 billion in revenue over the 18 years of operation with this investment. The company expects a return on investment within 4.5 years after the mine begins production. The post-tax net present value (NPV) stands at $1.58 billion, with an internal rate of return (IRR) of 23.3%, based on a consensus nickel price of $8.49 per pound.

Adapting to Market Conditions

This adjustment to the project’s initial cost follows a "redesign" of the original mine plan, which Lifezone announced in response to declining nickel prices. The metal is currently trading at $15,096 per tonne in London (LME), a decrease of about 68% from its 2022 peak of $48,000. Despite this market downturn, driven by oversupply, Lifezone intends to proceed with the project. This decision contrasts with BHP and First Quantum, which suspended their nickel operations in Australia in 2024.

Looking ahead, Lifezone plans to launch the project financing process with the goal of making a final investment decision by 2026. While the specific financing options under consideration were not disclosed, the U.S. International Development Finance Corporation (DFC) sent a letter of interest in 2024 expressing its intent to provide loans for Kabanga's development.

Beyond financing, Lifezone will also need to secure the necessary mining permits from Tanzanian authorities. The Tanzanian state holds a 16% stake in the project, with Lifezone Metals holding the remaining 84%. In addition to its stake, Dodoma expects to receive $1.2 billion in royalties and other taxes, along with $2.4 billion through corporate income tax.

Aurel Sèdjro Houenou