BHP is considering re-entering the nickel industry with a $1 billion ($1.5 billion) mine in Tanzania that promises to be a lower cost producer than the world-beating Indonesian nickel industry.

The ASX-listed resources giant pulled out of nickel mining last year when it suspended its West Australian operations. BHP decided to mothball those mines and a Perth refinery after a surge of supply from Indonesia, where production is largely backed by the Chinese government.