Glencore, Barrick Gold Considering Selling Tanzania Nickel Project

BHP Mining Mine Ore Coal

Mining giants Glencore PLC and Barrick Gold Corp. are looking to sell a joint nickel development project in Tanzania, according to people familiar with the matter, in a sales process that may struggle amid volatility in the pricing of this metal.

The two mining giants each own half of the Kabanga nickel project in northwest Tanzania and have been touting the property for several months, according to the people familiar with the matter. Neither company has hired a bank to sell the property, according to two of these people.

The asset is one of many that have been put up for sale in recent years as miners rejig their portfolios and raise money to mend battered balance sheets.

Glencore Chief Executive Ivan Glasenberg has repeatedly said he is focused on purchasing developed mines and that he isn’t interested in so-called greenfield projects, which require hefty cash outlays.

Barrick Gold is selling assets as it looks to reduce its debt pile by $3 billion before the end of the year. The Toronto-based gold miner tried to sell its stake in Kabanga two years ago and hired a bank to tout the asset.

Some bankers believe that, while Kabanga’s ore is of a high grade, the sale will be as difficult this time around. Given the size of the nickel market the field of potential buyers remains smaller than in other metals, from gold to iron ore. Kabanaga is also considered in a remote location with little infrastructure.

In addition, the price of the metal remains volatile, which some bankers believe could put investors off the asset.

While nickel has been rising in recent weeks, it is down 5.3% this year and is off 31% from two-year highs reached last May. Many traders and analysts think that nickel’s long period of price falls is nearing its end and prices will turn higher as supply struggles to keep up with demand.

Mr. Glasenberg said on a March 3 earnings call that he expects nickel prices to rise amid expectations that demand outpaces supply later this year.

“Exactly when the price will move, we cannot predict, but the market is looking good” in commodities such as nickel, he said on the call.

The project began in 2007 as a joint project between Barrick and Xstrata PLC, which was taken over by Glencore in 2013.

—Tatyana Shumsky contributed to this article.

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