British Mining Company signs Agreement with Tanzanian Government to develop Kabanga Nickel Project

British mining company Kabanga Nickel has signed a framework agreement with the Tanzanian government to develop the world's largest battery-grade nickel sulphide deposit in the northwest of the country, it has been reported. As part of the deal, the two sides established a joint company called Tembo Nickel, which will mine, process and refine category 1 nickel, which contains cobalt and copper by-products.

Kabanga Nickel is a major shareholder in the new entity, with an 84 per cent stake. Tanzania has the remaining 16%, which is the government's usual stake in all mining projects in the country. The economic benefits of the Kabanga nickel project, formerly owned by Barrick Gold and Glencore, will be shared equally between the two shareholders, the two sides said in a statement.

Tanzania, the fourth largest gold producer in Africa, has sought higher income from its rich mineral resources in recent years through a comprehensive reform of the financial and regulatory system of its mining industry. The Kabanga project has 58 million tons of raw mineral resources with a nickel content of 2.62%, including 1.52 million tons (3.3 billion pounds) of nickel, which is a key component in the manufacture of electric car (EV). The deposit also has large amounts of cobalt and copper and has a useful life of 30 years, the company said. Kabanga Nickel indicated that it would obtain all project data and information from Barrick and Glencore, including the draft 2014 feasibility study and subsequent updates.

The company also said it would build a hydrometallurgical plant to reduce its carbon footprint and minimise environmental impact, as well as reduce capital and production costs. Chris Feng, vice chairman of the company, said: "the project aims to develop the country's vision of adding value to all minerals and to expand the refinery beyond Kabanga, which will make Tanzania a regional and central hub for East and Central Africa. Minerals will be processed in Africa."