Lifezone Metals poised to unlock the first significant nickel mine in East Africa

Lifezone Metals Chief Executive Officer Chris Showalter recently granted an interview to Investment Reports regarding the company’s flagship Kabanga Nickel project in North-West Tanzania and here are the excerpts.

How essential is nickel in the green transition and what role does it play in the current electric battery movement?

Nickel plays a fundamental role in the electric battery movement, especially in the context of lithium-ion batteries used in electric vehicles, such as those manufactured by the likes of Tesla, Ford and Volkswagen. According to Chris, Elon Musk has emphasized that these should be referred to as nickel batteries since a significant portion, or about 68%, of the metal content is nickel. Nickel’s vital role comes from its substantial presence in these batteries, dictating storage capacity and, by extension, the performance (range) of the battery. In the grand scheme of the green transition, Chris accentuates that addressing the mining industry’s negative perception and the associated CO2 emissions, particularly from smelting processes which contribute around 7% of global greenhouse-gas emissions, is imperative. This is where Lifezone Metals aims to make a pivotal change by introducing its Hydromet Technology, a greener alternative to smelting that significantly reduces CO2 emissions. Chris projects this initiative to create a revolution by producing cleaner nickel with a considerably reduced carbon footprint.

Lifezone is pioneering this endeavor with its Kabanga Nickel project in North-West Tanzania. Chris emphasizes the urgency to steer away from the current nickel sourcing methods, particularly in Indonesia, which involves detrimental environmental practices such as clear-cutting rainforests. He cited the large difference in carbon footprint between nickel sourced from Indonesia and potential sources like Tanzania, emphasizing a pressing need for newer, cleaner nickel sources. He portrays Lifezone Metals as a frontrunner in this space, with its Hydromet Technology targeting to produce nickel with a CO2 emissions equivalent between 2 to 4 tons per ton of nickel equivalent, as opposed to the 30 to 80 tons CO2 per ton of nickel equivalent produced through existing processes in Indonesia.

Could you discuss Lifezone Metals’ Hydromet Technology and its capabilities in terms of yield compared to traditional methods?

Their Hydromet Technology promises similar, if not slightly better, yields (or “recoveries”) compared to traditional smelting processes. However, the standout feature of Lifezone’s Hydromet, according to Chris, is its capability to achieve the production targets faster and in a more environmentally friendly manner. The technology is not in its nascent stages; it is a variation of systems already utilized globally and a technology that Lifezone Metals’ founders have spent the better part of three decades refining and optimizing. The unique proposition here is the innovative approach Lifezone brings in optimizing the technology, making it more sophisticated and efficient, ready to be integrated into different operations globally.

Shifting the focus to the Kabanga Nickel project, Chris highlights that it will not only produce nickel but also offer a clean and single-source cobalt option, creating healthy competition among car companies for this cobalt output due to its ESG credentials and non-artisanal mining attribute. It potentially stands as a badge of environmentally conscious sourcing, clearly distinguishing itself from the controversial cobalt sourcing from the Democratic Republic of Congo (DRC).

Considering the geopolitical landscape, how can the West compete with China in the critical metals supply chain, and what role does Tanzania play in this scenario?

The geopolitical dynamics are indeed challenging, with China having a considerable lead due to their swifter project implementation, disregarding many environmental standards that Western companies adhere to. However, Chris sees a marked shift with increased engagement from the West, particularly the U.S., in Africa, showcasing a strong intent to foster a competitive environment in critical metals mining. The U.S. has initiated significant projects like the Libido corridor and the Partnership for Global Infrastructure Initiative (PGII) to facilitate critical infrastructure development supporting metal mining in Africa, indicating a conscious effort to strengthen their position in the global supply chain.

Chris emphasizes that the business model needs to evolve to create a more inclusive and beneficial partnership with host nations like Tanzania. A sustainable approach involves not just extracting ores but also processing and refining them in the host nation, thereby retaining more value within the country. This is the essence of Lifezone’s business model with its Kabanga project in Tanzania, working in harmony with the country’s vision to create a win-win situation for all parties. It portrays a pathway for the West to create a substantial impact by aligning with the host nations, ensuring a respectful and mutually beneficial relationship over the sovereign resources, ultimately fostering a robust and competitive environment against the dominant Eastern model led by China.

What is Lifezone Metals’ strategy regarding the mining industry in East Africa, especially considering the potential increase in demand and your plans for expanding to new sites?

Firstly, Lifezone is currently positioned as the pioneer unlocking the first significant nickel mine in East Africa, Kabanga, setting the stage for Tanzania to become a hub where metals are processed on the African continent. Through this establishment, smaller satellite projects that were not previously viable are expected to become operable, thanks to the proximate processing and refining capacities we are setting up in the country. The aim is to tap into the rich nickel belt that extends to regions with untapped potential, like Burundi, and to help transform their economies while building a robust supply chain of nickel, cobalt, and other metals in East Africa.

Moreover, this venture also ties into broader geopolitical and economic frameworks, including fostering ties with the U.S government and other stakeholders. We are exploring ways to incorporate African nations into the global supply chains more directly, focusing on different policy mechanisms that would allow for a seamless integration of the metals into the manufacturing processes of batteries in North America. This is a delicate, yet crucial initiative in the current times, and stands as a testimony to Africa’s rising prominence in the battery supply chain, underscored by investments from major players like BHP in the Kabanga project.

With a decade-long presence in the industry through Lifezone Metals, could you elaborate on the company’s vision and the journey so far, especially highlighting your strategy on clean and sustainable mining?

Lifezone Metals has been active for around a decade, with a team that brings to the table experience from their entire careers.

We have been working assiduously towards realizing a strategy aimed at revamping the existing methods of refining to introduce cleaner, more sustainable hybrid processing techniques to replace the conventional methods of smelting. This is in line with our overarching vision to play a pivotal role in cleaning up the metals supply chain.

The commitment to this vision is reinforced by significant endorsements we have received, a notable one being the $90 million investment from BHP in the Kabanga project and $10 million into Lifezone, marking their return to Africa after more than a decade of absence. This partnership underscores a shared commitment to uphold high standards in mining practices, focused on clean and sustainable approaches. It is not just a business strategy, but a concerted effort towards responsible mining, reflecting a deeper understanding and respect for the environment and the societal stakeholders involved.