Marketing of nickel product from new mine starts

28th July 2023

Marketing of nickel product from new  mine starts

PROCESSING PROGRESS Lifezone Metals will implement its Hydromet mineral processing technology at its Kabanga nickel project

An offtake marketing process has been initiated by modern metals mining company Lifezone Metals pertaining to the nickel, copper and cobalt from its Kabanga nickel project, in north-west Tanzania, the company reported in April.

The miner believes the Kabanga project comprises a significantly large and high-grade nickel sulfide deposit.

Lifezone Metals seeks to support the global clean energy transition through licensing of its proprietary Hydromet mineral processing technology as an alternative to smelting in metals production.

Consequently, becoming an emerging supplier of responsibly-sourced, low-carbon and low-sulphur dioxide emission metals to the battery electric vehicle and hydrogen energy markets.

Lifezone Metals is entitled to certain offtake marketing rights with respect to the Kabanga project and has retained the marketing rights for up to 40%, in aggregate, of the total contained nickel, cobalt and copper production from the project.

Given the interest in these products from original-equipment manufacturers, the company has started a process aimed at monetising the offtake from the Kabanga project.

In this regard, global investment bank RBC Capital Markets has been engaged to run a formal offtake marketing process, with further updates on the process to be provided as appropriate.

“The commencement of the offtake marketing process for the nickel, cobalt and copper to be produced at the Kabanga project is a key milestone in the development of Lifezone Metals, as we work to build a champion for cleaner metals to support the global energy transition,” says Lifezone Metals CEO Chris Showalter.

He adds that there is a clear focus on the upstream environmental footprint, which is driven by consumer demand and regulatory targets in the US and Europe; Lifezone Metals expects a shift away from heavy-polluting sources of raw materials into the battery and electric vehicle supply chain.

“Recent test results indicate that the Kabanga project’s nickel concentrate is amenable to processing using the Hydromet technology, which we believe is key to unlocking the value of the project and paving the way for our future cleaner metal products,” he points out.

Additionally, he says the company’s mission is to provide commercial access to proprietary technology and cleaner metals production through a scalable platform underpinned by Lifezone Metals’ tailored Hydromet technology.

This technology has the potential to be a cleaner and lower-cost alternative to smelting, allowing Lifezone Metals to responsibly and cost-effectively provide cleaner metals.

“By pairing Tanzania’s Kabanga project, which we believe is one of the largest and highest-grade undeveloped nickel sulphide deposits in the world, with our proprietary Hydromet technology, we will work to unlock the value of a key new source of supply to global battery metals markets,” says Showalter.

Further, Lifezone Metals has also partnered with multinational diversified miner BHP, the latter having invested $100-million in the Kabanga project, as it aims to empower Tanzania to achieve full value in-country and become the next premier source of nickel.

Project Overview

The Kabanga project is an exploration-stage project, which, according to the latest mineral resource estimate, has an attributable 44-million tons of nickel, at an average grade of 2.61%, in addition to copper grading at 0.35% and cobalt grading at 0.19%.

Once operational, it is contemplated that the Kabanga mine, and its proposed associated hydromet refinery at Kahama, will produce refined high-grade nickel, London Metal Exchange Grade A copper cathode, and cobalt.

In January 2021, Lifezone Metals’ subsidiary Kabanga Nickel Limited (KNL) entered into a framework agreement with the government of Tanzania, setting out, among other things, the arrangement in relation to the conduct of future mining operations for the Kabanga project.

In April 2021, KNL acquired the intellectual property rights and the existing assets to the Kabanga project, and in October 2021, the government of Tanzania issued a special mining licence to KNL.

The various previous owners of the Kabanga project cumulatively conducted drilling of 587 km, through 1 404 drillholes and cumulatively spent about $293-million on drilling and studies.

Lifezone Metals believes this exploration provides a deep understanding of the potential value of the asset that the Hydromet technology can unlock in a potentially more economic and environment-friendly way.

The company reports, at present, that it is making “good progress” on early site works, environmental planning, further special mining licence exploration and feasibility studies towards its goal of achieving first ore in 2026.