On 19th January 2021, the Ministry of Minerals of Tanzania signed an investment agreement with Kabanga Nickel Limited of the UK (formerly LZ Nickel Limited) for the development of the nickel mining project in the East African country.
Located 130 km southwest of Lake Victoria in the Ngara District of the Kagera Region in northwestern Tanzania, Kabanga is the largest development-ready nickel sulfide deposit in the world, unmatched in scale and grade, with at least 30 years life of mine and further exploration upside.
The project was previously owned by a joint-venture between Barrick Gold Corporation (Barrick) and Glencore until 2018 when the Magufuli administration revoked their license following the introduction of new mining bills in 2017.
The Government of Tanzania and Kabanga Nickel have agreed to form a joint-venture, Tembo Nickel Corporation, which will own two subsidiaries: Tembo Nickel Mining Company which will be involved in Nickel mining in Kabanga, and Tembo Nickel Refinery Company which will be involved in mineral refining in Kahama, Shinyanga.
As per the new mining laws, Tanzania enjoys a 16% free-carried interest (equity interest granted to the State by the company holding a mining license), and 50/50 sharing in the economic benefits generated by the mining operations (after the recoupment of capital investments.)
President Magufuli praised the plan to build a smelting and refinery plant in Kahama. On its website, Kabanga Nickel explains that by producing refined metals (class 1 nickel, cobalt, and copper refined metals) the company will share more value with the people of Tanzania, which is consistent with the Government’s policy initiatives of in-country beneficiation and local value addition.
These fully refined strategic metals will be exported directly to customers around the world while retaining the significant value and flow-on benefits within the country.