UK firm Kabanga Nickel Company announced it will delay its nickel plan in Tanzania. The company it will start mining nickel deposits in three years despite being commissioned to start operations.
Chief executive Chris Showalter said the firm was focusing on completion of a smelting factory currently under construction for the mineral concentrates. He cited logistical challenges in the importation of building materials due to Covid-19 lockdowns as the reason for the delay.
The Kabanga project is the largest development-ready nickel sulphide deposit in the world in scale and grade, with at least 30 years life of mine. Nickel is used to manufacture motor vehicle batteries. The company signed a binding framework agreement with Dodoma a year ago for the development of the Kabanga nickel deposits discovered in Kagera, close to the Burundi and Rwanda borders.
The project was given a green light by Tanzania’s National Assembly following a review of the Mining Act of 2017, which requires the firm to first build a smelting factory to purify mineral concentrates with a view to ascertain its value before export. The 2017 mining laws include a 16 percent free carried interest for the government and restrictions on the export of raw resources.
“Our commitment is to create a ground for a win-win situation. We want Tanzanians to benefit from the country’s natural resources,” said Minister for Minerals Doto Biteko .
Kabanga Nickel Company has invested $40 million targeting to produce over 40,000 tonnes of nickel, 6,000 tonnes of copper and 3,000 tonnes of cobalt annually. The company has a 33-year-lease according to the law, alongside a mineral trading license worth over $ 1.2 billion, paid in taxes and royalties yearly.
Tanzania owns 16% stake in the project under the Tembo Nickel Company while the UK firm owns the remaining share in partnershp with Australian miner BHP Billiton. Minister for Minerals Doto Biteko said that the Kabanga project was on a well-defined path to production that would make Tanzania globally known.