US-backed group weighs $500 million Tanzania nickel investment
A US government-backed consortium is negotiating a deal to invest more than $500 million in a large nickel project in Tanzania, as the Trump administration ramps up efforts to lock down supplies of key metals.
Bloomberg News reported this month that Lifezone Metals Ltd. has chosen Orion CMC as its preferred equity partner to develop the Kabanga nickel deposit in the East African country. That group was established in October with sovereign backing from the US International Development Finance Corp. and Abu Dhabi’s L’imad Holding.
Under the transaction being finalized, Orion CMC would acquire a stake in Kabanga Nickel Ltd., the Lifezone unit undertaking the project, according to people familiar with the matter, who asked not to be identified discussing confidential information. The people didn’t specify exactly how much Orion CMC intends to pay but one gave a range of $500 million to $600 million and another said the amount is nearer $500 million.
Tanzania owns 16% of Kabanga Nickel and Lifezone controls the rest of the firm. If the deal goes ahead, Lifezone plans to retain control of the subsidiary, while Orion CMC would take a sizable minority interest, some of the people said.
Lifezone, Orion Resource Partners and the DFC declined to comment.
The partnership is taking shape as various US government agencies work on a flurry of financing agreements to shore up access to critical minerals and reduce dependence on China. Bringing Kabanga into production would provide a significant new source of nickel, which is mainly used to manufacture stainless steel but also electric-vehicle batteries.
Indonesia accounts for about 60% of global nickel supply after a wave of investment by Chinese smelting firms that followed a ban on exports of raw ore in 2020.
Orion CMC was set up by its three founders with initial funding of $1.8 billion. The DFC recently approved an additional $900 million of financing to “support Orion CMC’s rapidly expanding pipeline of mining and minerals opportunities to help address China’s strategic chokehold,” Chief Executive Officer Ben Black said in July. The vehicle is led by Orion Resource Partners LP, a global investment firm specializing in metals and mining.
While Lifezone hasn’t publicly announced the selection of Orion CMC, CEO Chris Showalter said late last month that his firm had picked a favored partner out of multiple offers to make a “strategic equity investment” in Kabanga.
The New York-listed firm has also said it’s hired Societe Generale SA to raise debt for the project and expects to reach a final investment decision early next year. The company estimates it will require $942 million to build the mine.
The DFC has been involved with Kabanga since at least 2024, when it began due diligence on providing political risk insurance and expressed interest in extending loans to the project.
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