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Agence Ecofin
11 April 2023 Last update on Tuesday, April 11, 2023 At 4:51 PM

The energy transition has a lot to offer the Tanzanian mining sector. A major African gold producer, the country also hosts significant resources of rare earths, graphite and nickel, all products used in the electric vehicle industry.

Mining company Lifezone Metals has entered into a framework agreement with the Tanzanian government to build a battery-grade nickel production plant. This is one of the announcements made last week by US Vice President Kamala Harris during her visit to Tanzania, adding that nickel will be delivered to the US market and the global market as early as 2026.

According to a press release from the White House, the conclusion of this agreement is the result of negotiations carried out with the support of the G7 initiative called PGII (Partnership for Global Infrastructure and Investment) and the company TechMet, which specializes in critical metals and partly owned by the US government.

This project is an important and pioneering model that uses innovative and low-emission standards. It is important to note that the raw minerals will soon be processed in Tanzania, by Tanzanians,” commented Vice President Harris.

The nickel processed in the future plant will indeed come from Kabanga, a project owned 16% by the Tanzanian government and 84% by Lifezone Metals (formerly Kabanga Nickel). On the occasion of the signing of the mining lease in October 2021, the Tanzanian Minister of Mines indicated that the exploitation of Kabanga could bring in $7.5 billion to the State over 33 years. 

This estimate should now be revised upwards, if we add to it the revenues linked to the export of battery-grade nickel, which will start in a few years.

US support for the local nickel processing project in Tanzania is a good example of how African states can benefit from the energy transition in mining. The African countries that have nickel, copper, cobalt, rare earths and other critical metals are in fact being increasingly courted by both the European Union and the United States, determined to challenge Chinese domination over these essential products for the tomorrow’s world.

Long relegated to the status of suppliers of raw materials, the continent’s mining countries therefore have the opportunity to negotiate more advantageous agreements in order to generate more income with their mining resources.

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