Tanzania agrees to pay Indiana Resources Sh237 billion over Ntaka Hills dispute
What you need to know:
- Tanzania has agreed to pay a total $90 million in settlement of the ICSID dispute sum represents 82.5 percent of the original amount of the ICSID Award of $109 million
- Settlement sum to be paid in three instalments: $35 million already paid, $25 million on or before 25 October 2024 and $30 million on or before 30 March 2025
Dar es Salaam. Tanzania has reached a significant settlement agreement with Indiana Resources Limited, resolving a lengthy dispute over the expropriation of the Ntaka Hills Nickel Project.
As a result, the government has agreed to pay a total of $90 million (approximately Sh237 billion) to Indiana Resources and its associated entities, marking the end of nearly seven years of arbitration at the International Centre for Settlement of Investment Disputes (ICSID), a World Bank division.
Tanzania’s Attorney General Eliezer Feleshi in a short message also confirmed that the two sides had reached a settlement to end the dispute
“Yes, it is true,” he wrote.
Indiana Resources, which holds a majority stake in Ntaka Nickel Holdings Ltd (NNHL), Nachingwea UK Ltd (NUKL), and Nachingwea Nickel Ltd (NNL), in a statement issued early on July 29, announced that Tanzania will make the payment in three installments.
The first installment of $35 million has already been received, with $25 million is due on or before October 25, 2024; and the final $30 million is to be paid by March 30, 2025.
Executive Chairman Bronwyn Barnes expressed satisfaction with the settlement, highlighting its significance for Indiana Resources.
“I am very pleased to have concluded this settlement on behalf of the Claimants with representatives from the Government of Tanzania,” Barnes said.
“Following the cancellation of our licence for the Ntaka Hill Nickel Project in January 2018, we pressed our claim for compensation. The settlement amount represents over 82 percent of the original award handed down by ICSID in July 2023 and will save the Company considerable time and costs in pursuing further proceedings.”
Barnes said the settlement as a demonstration of Tanzania’s commitment to working with international investors.
She also indicated that if Tanzania defaults on any of the agreed payments, Indiana Resources retains the right to recommence annulment processes or seek enforcement through ICSID.
The ICSID annulment hearing, which took place in Washington, DC on July 26, 2024, will be put on hold pending the completion of the settlement process.
Indiana further said that it will request that the ICSID ad hoc Committee suspend proceedings until Tanzania fulfills its payment obligations.
According to Indiana, should Tanzania fails to meet the payment deadlines, the Claimants can seek to resume annulment proceedings or pursue arbitration under the London Court of International Arbitration Rules.
Other cases
Last week, another case took a similar trajectory after the International Centre for Investment Dispute Settlement (ICSID) has extended the suspension of proceedings between British real estate developer Pennyroyal Limited, and the government of Tanzania until next year.
The extension, now until January 12, 2025, allows both parties to pursue negotiations for an out-of-court settlement regarding a project based in Zanzibar.
The case stems from the government's appropriation of 411 hectares from the developers in Matemwe, Zanzibar, with registration in July 2023 and the tribunal's initial session held on December 14, 2023.
The specifics of Pennyroyal’s demands remain unclear, although the project was initially valued at $1.6 billion upon completion. If a settlement is reached, it would mark Tanzania's second out-of-court agreement in less than a year.
In October 2023, Tanzania settled with Canadian mining company Winshear Gold Corp, paying $30 million (Sh75 billion) following a dispute over the expropriation of its SMP Gold Project in southwest Tanzania, originally seeking over Sh250 billion in compensation.
