Foreign minister Palamagamba Kabudi said during a signing ceremony in Bukoba that the government would own a 16% undiluted free-carried interest in the nickel project through a new joint venture company, Tembo Nickel Corporation, 84% owned by Kabanga Nickel.
By law, Tanzania's government gets a 16% stake in all mining projects in the country.
Nickel is a key electric car battery material and Kabanga - in Tanzania's northwest - is the world's largest development-ready, high-grade nickel sulfide deposit, according to Kabanga Nickel. It is estimated to contain more than 1.52 million tonnes of nickel.
Barrick Gold and Glencore lost the nickel project in 2018 when Tanzanian President John Magufuli's administration revoked their retention licence along with 10 others as part of new mining laws and regulations.
Kabanga Nickel, which was previously called LZ Nickel, said it has agreed with Barrick and Glencore to acquire all the project data and information from them, including a 2014 draft feasibility study report and subsequent updates.
As well as starting the mine, Kabudi said Kabanga Nickel is required to build a nickel smelter which can also smelt other metals such copper and gold.
Kabanga Nickel said Tembo would produce Class 1 nickel and cobalt products, and LME Grade A copper cathode. The mine is estimated to contain more than 100,000 tonnes of cobalt - also used in batteries.
(Reporting by Nuzulack Dausen; editing by Helen Reid and Jason Neely)
By Nuzulack Dausen