NYSE-listed Lifezone Metals has taken full control of one of the world’s most significant undeveloped nickel sulphide projects after acquiring BHP’s 17% stake in Kabanga Nickel.

The transaction, announced on Friday, results in Lifezone owing 100% of Kabanga Nickel, which in turn holds an 84% interest in Tembo Nickel, the Tanzanian operating company behind the Kabanga project. The remaining 16% is held by the government of Tanzania.

Existing agreements between BHP and Lifezone, including the T2 option agreement, have been terminated, Lifezone said in a statement. The company has also assumed full control of 100% of the offtake from the project.

The deal comes at a time when BHP continues to evaluate its long-term role in the nickel sector. The company’s Western Australia Nickel operations have been under temporary suspension since early 2025, and BHP confirmed last week that it is weighing options for those assets, including divestment, restart or closure. 

The transaction with BHP is structured as a deferred consideration agreement. Lifezone will make an initial fixed cash payment of $10-million, due either 12 months after a final investment decision (FID) is made at Kabanga or once the company has raised $250-million in funding. A second payment will be triggered 12 months after the start of commercial production and is indexed to Lifezone’s share price performance. The total consideration is capped at $83-million, or $75-million if a resettlement action plan trigger event occurs.

Lifezone said BHP had agreed to a 12-month lock-up on its Lifezone shares and has granted the company a right of first offer on any future divestment.

“This transaction to own 100% of Kabanga Nickel allows Lifezone to fully align our technical, commercial, and ESG strategy as we advance Kabanga toward the FID,” said Lifezone founder and chairperson Keith Liddell.

“We are committed to delivering the project responsibly and to creation of long-term value for all our stakeholders.”

CEO Chris Showalter added that BHP had been a supportive and value-adding partner and that the major's exit coincided with the project’s transition into its next stage of development.

On Friday, Lifezone filed a comprehensive feasibility study for the Kabanga project, declaring the first mineral reserves in the project's 50-year history.

The study outlines the initial development phase, including a 3.4-million-tonne-a-year underground mine, processing infrastructure and tailings storage. The project will produce a high-grade nickel, copper and cobalt concentrate for downstream processing and has an expected 18-year mine life.

The feasibility work supports a capital-efficient and technically viable development, with an after-tax net present value of $1.58-billion and internal rate of return of 23.3%. Pre-production capital is estimated at $942-million. Lifezone expects to generate $4.6-billion in after-tax free cash flow over the mine’s life. Independent cost analysis indicates Kabanga will sit in the first quartile of the global nickel cost curve.

The government of Tanzania is expected to receive $3.6-billion in royalties, taxes and dividends through its 16% free-carried interest and under the country’s economic benefit sharing principle.

Standard Chartered Bank has been appointed as Lifezone’s financial adviser to arrange short-term development financing, which will fund early works and resettlement activities and bridge the company to FID. Societe Generale is advising on the long-term project finance package, which could include support from the US International Finance Corporation and export credit agencies.

Showalter said the completion of the feasibility study was a “defining moment” for Lifezone and the project, describing Kabanga as a strategic asset in the global energy transition.

“It confirms the technical and economic strength of one of the world’s most significant undeveloped nickel sulphide deposits,” he said. “Our commitment to responsible mining, local partnerships and in-country beneficiation remains central to our vision of enabling cleaner supply chains.”

COO Gerick Mouton said the company’s technical and strategic approach was aimed at delivering a sustainable, capital-efficient operation. “Our focus remains on minimising environmental impact, maintaining transparent engagement with host communities, and delivering enduring value for all stakeholders,” he said. “This historic milestone would not have been possible without the dedication and expertise of the many consultants and contractors who contributed to the study’s success.”

With the transaction complete, feasibility work finalised and financing discussions well advanced, Lifezone is targeting a FID in 2026.