BHP Exits Tanzanian Nickel Project with $83M Sale, Analysts Forecast Downside from Current Levels

BHP Group Ltd (BHP) has divested its 17% stake in the Kabanga nickel project in Tanzania for $83M, aligning with its strategic focus on the nickel market. Analysts forecast an average price target of $50.36, indicating a potential downside of 5.97% from the current price of $53.56. BHP's GF Value estimate suggests a slight potential downside, indicating the stock may be priced near its fair value.

BHP Group Ltd (BHP) has sold its 17% stake in the Kabanga Nickel Project in Tanzania to Lifezone Metals for up to $83 million. This move aligns with BHP's strategic focus on the nickel market and follows a surge in production from Indonesia over the past few years [1].

The Kabanga Nickel Project, located in the northwestern part of Tanzania, is expected to produce around 50,000 metric tons of nickel per year once fully ramped up, a process anticipated to take about six years. The project's development costs are estimated at $2.49 billion, with a finalization date set for the end of 2026 [1].

Lifezone Metals, a company listed on the NYSE, now owns 100% of Kabanga Nickel Limited (KNL), the majority owner of the project. KNL holds an 84% interest in Tembo Nickel Corporation Limited (TNCL), the Tanzanian operating firm for the project. The remaining 16% is held by the Tanzanian government [2].

The transaction involves a fixed cash payment of $10 million and a deferred cash payment indexed to Lifezone's share price performance. The total consideration cap is $83 million, or reduced to $75 million if a Resettlement Action Plan (RAP) Trigger Event occurs [2].

Analysts have forecast an average price target of $50.36 for BHP, indicating a potential downside of 5.97% from the current price of $53.56. BHP's GF Value estimate suggests a slight potential downside, indicating the stock may be priced near its fair value [1].

References:
[1] https://energynews.oedigital.com/mineral-resources/2025/07/20/bhp-exits-25-billion-tanzania-nickel-project-partner-lifezone-says
[2] https://www.morningstar.com/news/business-wire/20250718862553/lifezone-metals-consolidates-control-of-the-world-class-kabanga-nickel-copper-cobalt-sulfide-project