• Tanzanian Government agrees to pay US$90m in settlement over unlawful expropriation of Ntaka Hill base metals project – 82.5% of the original US$109m awarded by the ICSID
  • The Claimant group has already received US$35m and will receive another two tranches of US$25m and US$30m
  • Indiana is now well funded through the A$10m repayment of an intercompany receivable from the Claimant group to advance its highly prospective Gold and Rare Earth exploration assets in the Gawler Craton, South Australia

 

Special Report: After nearly seven years, Indiana Resources has reached a monumental milestone after Tanzania agreed to pay it US$90m ($137m) as settlement for its unlawful expropriation of the Ntaka Hill nickel sulphide project.

The figure represents 82.5% of the original US$109m awarded by the International Centre for Settlement of Investment Disputes, which had ruled that Ntaka Hill – an advanced, development-ready asset with an estimated JORC resource of 56.2Mt at 0.63% nickel, 0.14% copper and 0.02% cobalt – was unlawfully expropriated.

The Claimant group, of which Indiana Resources (ASX:IDA) is a major shareholder, has already received US$35m from the Tanzanian government and expects to receive another two tranches of US$25m and US$30m on or before October 25, 2024 and March 30, 2025, respectively.

The initial payment will be used to repay the litigation funder and legal costs (~US$23m) with the balance of the funds to be retained for annulment and/or arbitral proceedings and enforcement if further instalments are not paid by Tanzania.

Negotiations are currently underway between the claimants in regards to distributing the settlement.

Once this is completed, the company expects to distribute proceeds to shareholders in two tranches, with the first proposed for December 2024 and the second in Q2 2025.

IDA adds that once the settlement is complete, it will end the need for costly and time-consuming enforcement efforts and finally draw a line under a nearly seven-year long dispute.

“I am very pleased to have concluded this settlement on behalf of the claimants with representatives from the Government of Tanzania,” executive chairman Bronwyn Barnes said.

“Following the cancellation of our licence for the Ntaka Hill Nickel Project in January 2018, we have pressed our claim for compensation for the loss of our investment in Tanzania.

“The settlement amount that Tanzania has agreed to pay the claimants represents over 82% of the original amount of the Award handed down by ICSID in July 2023 and, when completed, saves the company considerable time and further costs in pursuing annulment and/or arbitration proceedings and enforcement activities.

“This settlement clearly demonstrates Tanzania’s commitment to work with international mining investors to resolve the historical dispute between the parties. I am confident that Tanzania will fully abide by the terms of the settlement and that the remaining instalment payments will be made by Tanzania in compliance with the agreed terms.

“If for any reason Tanzania defaults on the agreed subsequent instalment payments, then we can recommence the annulment process at ICSID. This includes our right to pursue enforcement activities, which would involve the seizure of Tanzania’s assets in any jurisdiction that is a member of the World Bank.”

 

ICSID annulment hearing

The final ICSID annulment hearing took place in Washington DC on July 26, 2024.

In line with the agreed terms of settlement, the parties will now request that the ICSID ad hoc Committee suspend the annulment proceedings pending completion of the settlement process, which includes payment of the second and third instalments by Tanzania.

Should Tanzania default on payment of the second or third instalments, the claimants can request the Committee to resume the annulment proceedings and deliver its award on annulment, or refer the matter to arbitration under the London Court of International Arbitration Rules if the parties cannot reach an amicable settlement.

If the suspension is lifted and Tanzania’s annulment application is dismissed, then the claimants expect that Tanzania will abide by their written undertaking to ICSID to pay the outstanding amount of the full Award plus interest to the Claimants within 45 days.

Along with the distribution to shareholders, the settlement will enable Indiana to focus squarely on its rare earths and gold exploration ground in South Australia, where it’s made a number of exciting discoveries including at the Minos prospect.

 

 

 

This article was developed in collaboration with Indiana Resources, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

Read MoreNickel

Featured Companies

You might be interested in