Tanzania and an Australian-based company Indiana Resources Limited have settled for USD 90 million equivalent to Sh. 237 Billion for the unlawful expropriation of the Ntaka Hill Nickel Project, a nickel sulfide project in Lindi. So far Tanzania has already paid USD 35 Million.
This was revealed today July 29, 2024, in a statement by Indiana Resources which explains that the company has taken the offer from Tanzania which is less than the original amount awarded by the International Centre for Settlement of Investment Disputes (ICSID) which was about USD 109 Million to save time and cost in pursuing annulment and/or arbitration proceedings and enforcement activities.
Tanzania will be required to complete the remaining amount in two installments, USD 25 Million by October 25, 2024, and USD 30 Million by March 30, 2025.
The disputes between Indiana Resources and Tanzania emanate from the changes in the Tanzania mining laws in 2017 and 2018. On January 10, 2018, through its (Mineral Rights) Regulations 2018, the country declared that all retention licenses issued before the date of publication of the Regulations were canceled and shall cease to have legal effect.
This affected the Indiana Resources retention license for the Ntaka Hill Nickel Project, exploration for and development of nickel sulphide deposits in Lindi, Southern Tanzania with the company estimating a total value of up to USD 217 Million.
Retention licenses allowed companies to own some areas with minerals without developing in cases there were technical constraints, adverse market conditions, or other economic factors. Tanzania’s government had argued that the practice was exploitative as companies would hold large pieces of areas, adding them to their books without developing or allowing for the country to receive any benefit.
The haste nature of which regulation was implemented ended up costing the country significantly in arbitration as many companies such as Indiana Resources argued that they had suffered significant commercial losses due to Tanzania’s decision which equates to unlawful expropriation.
One Response
Its better that way. If the Tz govt handles its assets well, it will reap great rewards in the future rather than allowing entities to own its assets indefinitely, without improving or gaining anytging from them. Go Tanzania!!!