BHP has officially exited the $2.5 billion Kabanga Nickel Project in Tanzania, transferring its 17% stake to project partner Lifezone Metals in a deal worth up to $83 million. The exit includes an upfront payment of $10 million, with the remainder contingent on production performance and meeting environmental, social, and governance (ESG) benchmarks.

The transaction gives Lifezone full ownership of Kabanga Nickel Limited, which holds an 84% stake in Tembo Nickel Corporation, the operating company behind the project. The Tanzanian government retains a 16% free-carried interest.

BHP’s departure follows a global downturn in nickel prices and a supply glut largely driven by Indonesia. The mining giant, which recently paused operations at its Nickel West unit in Australia, said the decision reflects a strategic shift in capital allocation, though it still recognizes Kabanga as a world-class resource.

Located in northwestern Tanzania, Kabanga is considered one of the world’s largest undeveloped high-grade nickel sulphide deposits. With over 52 million tonnes of ore grading nearly 2% nickel, the project is expected to produce around 50,000 tonnes of nickel annually once operational.

Lifezone said it is finalizing a short-term development financing package to fund early construction works and community resettlement activities. This funding will also support preparations leading up to a final investment decision in 2026. The company is also in active discussions with several major diversified firms regarding potential long-term strategic partnerships.