After years of back-and-forth negotiations, Indiana Resources (ASX:IDA) seems to be clearing a path through its dispute with the Tanzanian Government over the Ntaka Hill Nickel Project in the country’s southeast.
The dispute dates back to mid-2017 when the Tanzanian government undertook sweeping amendments to its Mining Act. These were enacted in early 2018 and resulted in the cancellation of all retention licences issued prior to 10 January 2018, including those at Ntaka Hill. The underlying rights to these projects were then reverted to the Tanzanian Government.
As a result, Indiana’s operating subsidiaries — UK-incorporated Nachingwea UK and Ntaka Nickel Holdings, and Tanzania-incorporated Nachingwea Nickel, the claimants in the dispute — were stripped of their control of the Ntaka Hill Project.
An arbitration process launched in September 2020 with the International Centre for Settlement of Investment Disputes (ICSID), part of the World Bank, found in July 2023 that Tanzania’s expropriation of the Ntaka Hill Project was unlawful and in breach of the UK-Tanzania Bilateral Investment Treaty (BIT).
In July 2023, the arbitration tribunal ordered Tanzania to pay the claimants more than US$109.5 million in damages and additional losses, plus interest until the payment is made.
Later that month, Tanzania countered Indiana with a claim of its own seeking to have the US$109.5 million award set aside.
Now, however, Tanzania’s Attorney General has confirmed that the award — which, with interest, stands at US$118 million — will be paid in full within 45 days should its request for a licence annulment not be granted.
The Tanzanian Government has also pledged to accept the ICSID decision as final and not subject any payments to enforcement proceedings or the scrutiny of Tanzanian courts.
“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,” Indiana Resources Executive Chairman Bronwyn Barnes says.
“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$118 million — to the claimants within 45 days of the decision being handed down.”
“If Tanzania’s request for annulment is not granted, then Tanzania will pay the full amount of the award, including interest — currently US$118 million — to the claimants within 45 days of the decision being handed down”
Though that final decision could still be some months away, Indiana says its legal team has reviewed the documents filed by Tanzania, which “do not demonstrate that Tanzania will be able to meet the requirements to justify the annulment of the award”.
Shares in Indiana Resources, which also owns a package of gold, rare earths, and base metals tenements in South Australia, were up 25% to $0.08 as of 1:00pm AEDT on 27 December.
Write to Oliver Gray at Mining.com.au
Images: Indiana Resources