Firm linked to Kabanga nickel sets sights on global market
Dar es Salaam. Tanzania’s mining industry is set for more global exposure after Lifezone Metals, the parent company of locally-based Tembo Nickel, is set to list at the New York Stock Exchange (NYSE) after the completion of a series of transactions.
In an interview with The Citizen, the firm’s chief executive officer, Mr Chris Showalter, explained that the move will position the country’s mining industry at the centre stage of the world’s largest capital market, thus attracting more investment into the sector.
However, in the past, international companies such as Barrick, which is also listed at the New York Stock Exchange and at the Toronto Stock Exchange in Canada, and Glencore, which is also listed at such prestigious stock markets as the London Stock Exchange, the JSE in South Africa, and the Financial Times Stock Exchange, both oversaw the nickel project in Tanzania, but there was little the country could show for it.
Speaking to The Citizen about these precedents, Benedict Busunzu, country manager of Tembo Nickel, says that times are different now. “Back then, the environment was unfavorable. Infrastructure was poor, and there was limited access to electricity. But today, the government has invested heavily in infrastructure, such as building a railway line and improving access to electricity,” he explained.
He also added that there is more political will from the current government to ensure that the project comes to fruition.
“Another thing is that the price of nickel has gone up. In the beginning, it was a costly investment due to the dismal returns. But today the conditions are favourable and there is enough capital to keep the business going and maximize its potential,” Busunzu said.
Commenting on the technology used in the venture, Showalter said Tembo Nickel was established to unlock the Kabanga nickel project using a cleaner processing technology called hydromet. “We believe that the technology will position Tanzania at the forefront of the clean energy transition,” he observed.
Adding: “By accessing the largest pool of funding in the world via the NYSE, the transaction will help Tembo Nickel advance the development of the Kabanga nickel project and progress towards construction and production over the coming years.”
Furthermore, Mr Showalter noted that his firm’s hydrometallurgical green-processing technology has the potential to produce cleaner metals to support the growing demand for batteries used in electric vehicles (EVs) and fuel cell vehicles (FCVs).
Lifezone Metals founder and chair, Keith Liddell, said: “As the world shifts toward electric vehicles, Lifezone, with the Tembo Nickel partnership, aims to prove that greener, more affordable solutions for the energy transition are indeed possible.”
Globally, there is an ever-increasing demand for green energy. As such, Showalter believes that the listing of Lifezone Metals at the NYSE positions Tanzania at the forefront of the clean energy transition and climate change conversation, considering the technology used to extract and process nickel.
The Tanzanian government has in the past expressed concern over the export of raw natural resources, which would then be refined outside the country, thus depriving the government of extra revenue. However, according to Tembo Nickel, moving forward, all the extraction and refinery processes will be done in-country. “The Kabanga mine and hydromet technology are expected to produce refined high-grade nickel, LME Grade A copper cathode, and cobalt. Metals production from Tembo Nickel will take place entirely in Tanzania, retaining its benefits for the country,” explained Showalter.
“Ore will be mined and produced as a rich concentrate at Kabanga. This will then be transported to Kahama, where it will be processed using hydromet to produce finished metal, ready to be used around the world,” said the CEO.
This is a less-circuitous route than the previous process, where the minerals had to be shipped to Europe for processing. 2025 is the projected year for full operations to commence.
The signing of the framework agreement that established the Tembo Nickel Partnership for the development of Kabanga Mine and the refining of copper, cobalt, and nickel in 2021 was a historical milestone that targeted making Tanzania the mining refinery hub in East Africa and Central Africa.
This latest development has come at an opportune time because the project has the potential to be one of the lowest-cost, greenest metals production facilities in the world.
Doto Biteko, minister for minerals, said the government welcomes private sector investment that is centred on shared returns and mutual benefits. “We believe Tembo Nickel will be a key vehicle supporting Tanzania’s status as an emerging leader in the clean energy transition,” he said.
An initial investment of $40 million targeting to produce over 40,000 tonnes of nickel, 6,000 tonnes of copper and 3,000 tonnes of cobalt annually was made when the ground work for the company’s operations were laid.
Following a 33-year lease and alongside a mineral trading license, the government is expected to yield at least $7.5 billion in terms of taxes and royalties within that span of time. However, Mr Showalter believes the amount might increase after a new assessment is done.
Tembo Nickel is owned 84 percent by Kabanga Nickel and 16 percent by the government.