Dar es Salaam. Australian mining firm Indiana Resources Limited has reignited legal proceedings against the Government of Tanzania, citing an alleged breach of a $90 million settlement agreement signed in July 2024.
The renewed dispute follows the issuance of a “Notice of Jeopardy Assessment” by the Tanzania Revenue Authority (TRA) through its Lindi regional office—a move Indiana claims violates the settlement’s terms, which explicitly barred any tax claims on the compensation amount.
TRA Commissioner General Yusuf Mwenda confirmed the existence of the tax dispute, but expressed a willingness to resolve it through dialogue.
“It is true there are lawful tax issues addressed to them. We have agreed to engage their representative next week and resolve the matter lawfully,” Mr Mwenda told The Citizen. He, however, did not disclose the amount involved in the assessment.
The Office of the Solicitor General had not issued a comment by the time of going to press.
Under the Settlement Deed signed on July 29, 2024, Tanzania agreed to pay Indiana and its consortium of claimants $90 million in three instalments as compensation for the expropriation of the Ntaka Hill nickel project, which was under dispute at the International Centre for Settlement of Investment Disputes (ICSID).
The government has since fulfilled its financial obligations, disbursing the entire $90 million through instalments of $35 million in July 2024, $25 million in October 2024, and a final $30 million in April 2025.
However, Indiana contends that the TRA’s tax notice was unexpected and violates a clause in the agreement that shields the settlement from taxation or retroactive fiscal claims.
In a statement issued on June 3, 2025, the company said: “The Tanzanian government’s failure to withdraw this tax assessment has placed the company and other claimants in legal and accounting jeopardy.”
Indiana has now filed a Notice of Arbitration with the London Court of International Arbitration (LCIA), seeking declaratory relief.
In addition, it has withheld a letter of discontinuance from ICSID, effectively keeping the earlier arbitration process legally active.
Should Tanzania’s annulment request at ICSID be rejected, the country could be ordered to pay the full original arbitration award—$126.8 million plus interest—within 45 days, in accordance with earlier legal commitments.
As of May 2025, the outstanding balance under the original award stands at $36.88 million, despite the $90 million already paid under the negotiated settlement.
Meanwhile, Indiana has applied to the Australian Taxation Office (ATO) for approval to distribute the settlement proceeds to its shareholders as a capital return.
The company is awaiting final confirmation from the ATO before announcing payment timelines and amounts.
While the government has demonstrated a willingness to resolve historical disputes through negotiated settlements, the latest standoff highlights ongoing concerns over contract enforcement and regulatory certainty.
