BHP Group will buy a minority stake in a Tanzanian nickel project as the world’s biggest miner seeks to expand in commodities that will be central to the green-energy transition.

BHP’s investment in Kabanga Nickel Ltd. comes less than a month after the commodities giant bowed out of a bidding war for Noront Resources Ltd., which owns nickel deposits in Canada. Nickel, traditionally used to make stainless steel, is also a key component in lithium-ion batteries, allowing vehicle manufacturers to reduce the use of cobalt, which is more expensive and has a less transparent supply chain.

A return to Africa marks a shift in strategy for BHP, which has operated mainly in more developed countries in recent years. The company sold its last mining asset in Africa -- the rights to develop an iron ore deposit in Guinea -- in 2019 as it focused on Australia, Canada and Chile.

While Kabanga holds a huge nickel deposit, it’s particularly attractive because of the company’s plans to use hydrometallurgical technology, which allows the smelting of nickel in a more environmentally friendly way.

BHP will initially invest US$40 million in Kabanga Nickel and US$10 million in Lifezone, which owns the processing technology, the smaller company said in a statement. BHP will take an 8.9 per cent equity stake in Kabanga Nickel from its initial investment and raise its stake to 17.8 per cent after it makes an additional US$50 million investment. BHP’s purchase of a stake in Kabanga values the project at US$658 million.

Kabanga is seeking to raise funding for the project and plans to start operating in 2025, producing about 40,000 tons of nickel, 6,000 tons of copper and 3,000 tons of cobalt.

BHP’s focus on nickel represents a turnaround from less than a decade ago. The company had planned to exit the nickel business to focus on other commodities, and put its Nickel West unit in Australia up for sale in 2014. Today, BHP has identified the metal as one of its priority “future facing” commodities as the company shifts away from fossil fuels.