Tanzania has agreed to pay $90-million in settlement of an International Centre for Settlement of Investment Disputes (ICSID) dispute with Indiana Resources.
The dispute was the subject of arbitration at the ICSID, which is a division of the World Bank.
Indiana is the majority shareholder in UK-incorporated Ntaka Nickel Holdings and Nachingwea UK, and in Tanzania-incorporated Nachingwea Nickel; together, the claimants, and the manager of the joint venture responsible for activities relating to the arbitration against Tanzania.
The payment, when completed, will obviate the need for costly and time-consuming enforcement efforts and finally draw a line under a nearly seven-year-long dispute, Indiana avers in a statement.
“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,” says Indiana executive chairperson Bronwyn Barnes.
The settlement sum is payable in three instalments.
It represents 82.5% of the original amount of the ICSID award of $109-million.
Litigation funding and legal costs are to be repaid from the first instalment, with funds retained for annulment and/or arbitral proceedings and enforcement if Tanzania does not pay further instalments.
Distribution between the claimants is currently being negotiated with a further announcement to be made in due course.
Following completion, Indiana anticipates the first distribution to shareholders to occur in December and the second in the second quarter of 2025.
“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,” Barnes avers.
Meanwhile, Indiana plans to immediately advance exploration activities at its Central Gawler Craton project in South Australia.