Could you introduce Lifezone Metals to our international audience? 

We see ourselves as both a technology company providing solutions that help unlock stranded assets, and a new source of battery metals, which is the part of our business with physical mining projects. We have two flagship projects, the Kabanga nickel project in Tanzania, in partnership with BHP, and a recycling project in the US, in partnership with Glencore. Our proprietary hydrometallurgical processing technology eliminates the smelting phase from the refining process, helping the mining industry meet CO2 reduction targets, as smelting accounts for up to 80% of the overall emissions.  We are now in the commercialization phase, rolling out our know-how with two of the top five largest mining groups in the world. 

What attracted Lifezone to the Kabanga nickel project in Tanzania?

Kabanga was discovered by the UN Development Program in the 1970s, but due to its remoteness in north-west Tanzania, it had been dormant for all this time. We have a strong competitive advantage in this type of logistically-constrained asset because we are able to unlock domestic beneficiation. Domestic beneficiation is an incredibly powerful value proposition for many host governments who are shifting away from the old model of exporting heavy raw materials into local processing and value-addition. 

Tanzania has made huge commitments to infrastructure investments. Major projects include the recently commissioned Standard Gauge Railway going halfway across the country, going from Dar es Salaam to the capital, Dodoma, with multiple expansions planned into a wider East African artery, as well as the regional Rusumo Falls Hydropower Project and the upgrades of the grid line. These developments have allowed us to access rail from our refinery location, and to access grid power which was recently brought to the Kabanga site. The infrastructure developments are overlaid with the abundance of battery metal deposits, positioning Tanzania to become a central hub for metals processing and a future net exporter of power in a continent where power is a huge limiting factor.

How has Tanzania transformed under the presidency of Samia Suluhu Hassan?

President Hassan has turned a new page for Tanzania. Under the previous President, Tanzania had taken a hard line on mining, and the country was stuck. President Hassan is the first female and first Zanzibarian President in the Country’s history; she opened the doors to the international community, getting the story of Tanzania out. The fruits of her efforts are paying off, as exemplified by multiple recent investments, including the US$30 billion LNG project by a consortium led by Shell or the return of BHP for that matter. There is a nice buzz in Tanzania. 

BHP has returned to Africa after 10 years since it exited the continent, via the Kabanga project in Tanzania. Could you comment on this and the structure of the agreement?

BHP invested US$100 million in Kabanga as part of an earn-in agreement, whereby they currently own 17% of the project with the option to go to 60% by investing in different stages. The return of BHP in Africa, specifically in Tanzania, is a major event, and you can imagine the amount of due diligence they undertook before making this decision. I believe this is a strong endorsement of Tanzania and a credit to its government, but also to the quality of the Kabanga mineralization, which is truly exceptional – 43.6 MT of measured and indicated resources attributable to Lifezone (69.7% of the total) grading at 2% and another 17.5 MT in the inferred category at roughly 2.7 nickel equivalent. Kabanga is highly advanced, with the Special Mining Licence and environmental permits in place.

Could you explain to us the impact of Indonesia’s nickel market dominance on nickel pricing?

Nickel is in a very challenging part of the cycle and we have already seen corrective measures like mine closures as a result of margin compression. The Indonesian factor is driving this. Indonesia has over 65% of the market share in nickel, but the country is starting to focus less on market share gains and more on supporting the price to make sure its operations stay profitable going forward, as it recognizes there is a self-defeating point to adding new supply if it will hurt the entire sector. The big question for the industry is whether we can rely on a bifurcation of the price structure, as non-Indonesian projects could potentially benefit from supportive policies like the IRA in the US. Stratified pricing can be seen in the oil industry, with different prices for sweet light crude, West Texas, and the rest, so I believe this is a possibility for nickel too. Indonesian nickel has a huge CO2 issue, so this will drive the marketability of projects like Kabanga – the world needs about 10 more Kabangas if we are to replace the alternative from Indonesia.

Is the automotive industry ready to pay a green premium?

We are at the front lines of trying to determine whether a company with clean credentials on the metals delivered to the market can earn a green premium since Lifezone controls 40% of the marketing rights at Kabanga (BHP has the remaining 60%). Battery manufacturers and car manufacturers may not want to take Indonesian nickel but they do not have an alternative. However, if you look at Tesla’s annual report, about 33% of the CO2 associated with a Tesla vehicle is attributable to the nickel in the battery cathode. Indonesian nickel has between 60 to 100 tons of CO2/tonne of nickel as a result of the highly power-intensive thermal heat treatment steps to get to battery-grade nickel sulfates from low-grade nickel, not to mention the impact of cutting through rainforests and decimating those natural ecosystems. By comparison, by using our Hydromet Technology at Kabanga and producing locally without the Scope 1, 2, and 3 emissions associated with transport, we can provide nickel with ultra-low levels of CO2 emissions. At the same time, China is a very competitive EV producer, which has put pressure on Western manufacturers; the last thing they want is an additional cost, so it is a tough time to afford the luxury of paying a green premium. Do we think we should be paid the same price for our nickel that you would pay for a dirty nickel out of Indonesia? Absolutely not, but we are also not there yet in terms of ascribing a higher price.