US$118m in compensation on the table in Indiana’s Tanzanian dispute

Indiana Resources welcomes Tanzanian confirmation that US$118m Award compensation will be paid within 45 days of final decision on annulment for Ntaka Hill nickel project
Award handed down by a division of the World Bank is compensation for expropriation of the Ntaka Hill project
Dispute with Tanzania being arbitrated by International Centre for Settlement of Investment Disputes

Special Report: Indiana Resources has reached a significant milestone in its quest for payment of the Award handed down by ICSID in 2023 for compensation for the unlawful expropriation of its Ntaka Hill nickel sulphide project more than five years ago.

Ntaka Hill was an advanced, development ready asset with an estimated JORC Resource of 56.2 million tonnes at 0.63% nickel, 0.14% copper and 0.02% cobalt for 356,380t contained nickel.

It was expropriated more than five years ago by the Tanzanian government following legislative changes and has since been developed by other parties.

The dispute has been the subject of arbitration at the International Centre for Settlement of Investment Disputes (ICSID), a division of the World Bank.

Today Indiana announced that the Tanzanian Attorney General, on behalf of the Government of the United Republic of Tanzania, had provided a letter of confirmation to ICSID that Tanzania would unconditionally and irrevocably pay the full amount of the Award determined by the ICSID of US$118m – including interest – within 45 days of the final decision on annulment.

“This is a tremendous outcome for the claimants that brings us a considerable step closer to recovering the full amount owed as outlined in the Award which now stands at more than US$118m,” Indiana Resources (ASX:IDA) executive chairman Bronwyn Barnes said.

US$118m plus interest

The total amount payable by Tanzania under the award now stands at US$118 million – comprising US$114 million to date plus costs of US$4.28 million.

That doesn’t include interest, which continues to accrue at the rate of US$1 million per month until the full amount is paid to the claimants.

“The undertaking provided by the Tanzanian Attorney General has been accepted by ICSID as meeting the requirements of the ad hoc committee in their decision to not lift the stay on enforcement,” Barnes said.

“This means that if Tanzania’s request for annulment is not granted, then Tanzania will pay the full amount of the award, including interest – currently US$118m – to the claimants within 45 days of the decision being handed down.

“Indiana looks forward to providing further updates as this matter progresses in the New year.”

IDA also noted the recent announcement that Tanzania has secured more than US$1 billion in funding from the World Bank to support various projects in the country.

What’s next?

The Tanzanian Government has also said they will not subject the the payment of the award to any enforcement proceedings or to the scrutiny of Tanzanian courts and will abide by the final annulment decision when delivered by the ICSID ad hoc committee.

The timetable for the annulment process remains on track to be completed by mid-2024.

In the meantime, the company has recommenced its hunt for gold and rare earths in South Australia, with a new exploration campaign underway at the Central Gawler Graton project.

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.