What Nickel miner’s listing on New York bourse means

Dar es Salaam. Experts say the Tanzanian mining sector has received a boost following Lifezone Metals’ official debut on the world’s biggest stock market.

On Thursday, June 6, 2023, Kabanga Nickel Limited’s parent company, Lifezone Metals, commenced trading on the New York Stock Exchange (NYSE) after a business combination between special purpose acquisition company GoGreen Investments Corp. and Lifezone Holdings.

The transaction, reports say, netted the company gross proceeds of $86.6 million, including approximately $70.2 million from a private investment in public equity and the receipt of approximately $16.4 million of cash from GoGreen’s trust account, net of redemptions.

These proceeds were in addition to the previously announced investments by BHP Billiton (UK) of $90 million into Kabanga Nickel Limited, owner of the Kabanga project through Tembo Nickel Limited in northwest Tanzania, and $10 million into Lifezone Limited.

The Kabanga Nickel project is being implemented by Tembo Nickel Limited, which is co-owned by LZM’s Kabanga Nickel Limited (84%), and the Tanzanian government (16%).

The completion of the business combination establishes LZM as the first pure-play nickel resource and cleaner technology company listed on the NYSE. Local experts believe the move is a leap for the Kabanga Nickel Project, which is one of the largest and highest-quality undeveloped nickel sulphide deposits in the world.

Dr Dalaly Kafumu, the former commissioner of minerals, told The Citizen yesterday that Lifezone Metal offered the Kabanga Nickel project its ‘Hydromet Technology,’ a clean energy technology without carbon emissions.

He said the technology is environmentally friendly and helps the world transition to clean energy usage. “It assists initiatives around the world to be able to achieve zero emissions by 2050.”

“Lifezone Metal’s listing on the NYSE means a sure deal as the company will acquire the required capital for investing in this unique processing plant technology at Kabanga to produce nickel, copper, and cobalt metal for the EVs industry in the US,” he noted.

He added further that if Tanzania could push for some of the electric vehicle (EV) battery factories to be relocated to Tanzania, there would be more value to the national economy in terms of employment, technology transfer, and revenues.

“Nevertheless, processing the nickel ore to metal level instead of nickel concentrates before export is also a big leap to Tanzania’s increased benefits from the mining industry,” he said.

Natural Resource Governance Institute director Silas Olang noted that Lifezone Metals needed more capital to mine and develop the minerals, thus, its participation in the NYSE means an opening to raise funds to invest in the Kabanga mine.

He said in the current context of the energy transition, it means the company is required to mine with technology that produces low carbon emissions.

“In order for them to get that environmentally friendly technology, Lifezone had to team up with GoGreen Investments Corp., which has environmentally friendly technology to enhance better operations,” he said.

“The raised capital will be able to develop the mine and start production as well as refining and later getting profit, in which the government (Tanzania) will receive dividends from its 16 percent shares at Tembo Nickel,” he noted.

Mr Benedict Busunzu, CEO of Tembo Nickel, said that Lifezone Metals listing on the NYSE elevates the importance of the Kabanga Nickel Project on the world stage.

“It means that through Lifezone Metals, Tembo Nickel, a mine-to-metal company, has access to the deepest and largest pool of capital in the world to enable the development of one of the largest and highest-quality undeveloped nickel deposits in the world,” he said.

A Dar es Salaam-based stock market expert, Dr Susan Nzumbya, explained that the stock markets are where capital is created and that investing in a big market like the NYSE is an easy way to achieve the goal of getting more capital.

“I think it is a big and beneficial step for Tanzania as a country with rare minerals in the world and for the Lifezone Company as well. It is a big step that will lead to the implementation of its work in consideration of the environment through advanced technology,” she said.

Lifezone Metals announced its intention to list on the NYSE in December 2022 and has now reached the milestone.

According to the company, the exploration-stage Kabanga project uses Hydromet technology, which is said to reduce carbon dioxide emissions by up to 73 percent compared to traditional smelting and is free of sulphur dioxide.

In 2021, Lifezone’ Kabanga Nickel acquired the intellectual property rights and the existing assets of the Kabanga project and was awarded a special mining licence in October of the same year.