ADF STAFF
Russia’s invasion of Ukraine has caused the price of Russian nickel to soar, and Tanzania is positioning itself to meet the global demand and expand its share of the nickel market.
Even before the invasion, Tanzania was looking to increase its nickel mining. In January 2022, Australian mining company BHP Group announced that it had invested $40 million in a Tanzanian nickel project, marking the first new investment by the company in years.
United Kingdom-based private company Kabanga Nickel will be in charge of the project and expects to start producing in 2025. The operation aims for a minimum annual output of 40,000 metric tons of nickel, 6,000 metric tons of copper and 3,000 metric tons of cobalt, according to The Africa Report.
Kabanga owns 84% of the project, and Tanzania’s government owns the rest.
It’s not the only nickel project in the works in Tanzania. In June 2022, another Australian company, Resource Mining Corp., announced plans to begin a drilling program at its Kabulwanyele nickel-cobalt project in Tanzania’s Mpanda district, according to Australia’s Small Caps business news service.
The need for more nickel is fueled by the global automotive industry’s gradual transition to electric vehicles. Class 1 nickel, the purest form, is found at the Kabanga project in northwest Tanzania and is used in the lithium-ion batteries needed for electric cars. Officials with Kabanga say they expect automakers to buy more than half the nickel produced at the site.
The Africa Report noted that the Kabanga project timeline predicts minimum annual nickel equivalent production of 65,000 metric tons, with the mine having a life of at least 30 years.
Analysts say that Russia accounted for about 15% of global Class 1 nickel production in 2021. The invasion of Ukraine triggered a price shock, at one point doubling the price to a record high. Prices have gone down some since then.
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