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Indiana Resources (ASX: IDA) announced Tuesday that its dispute with the United Republic of Tanzania, which was the subject of arbitration through the International Centre for Settlement of Investment Disputes, part of the World Bank, has been settled, with $109.5 million awarded to the company.
The Tribunal delivered the award on July 14 and unanimously found that Tanzania had unlawfully expropriated the Ntaka Hill nickel project on January 10, 2018 in breach of the UK-Tanzania Bilateral Investment Treaty.
In April 2015, Tanzania issued a retention licence for the project, covering the same area as the Ntaka Hill prospecting licence, for a period of 5 years. In July 2017, the government of Tanzania amended the Mining Act 2010 by, inter alia, abolishing the legislative basis for the “retention licence” classification with “no replacement” classification.
In January 2018, Tanzania published the Mining (Mineral Rights) Regulations 2018, which made it clear that all retention licences no longer existed and that the underlying rights over all areas under retention licences, including the one held for the project, reverted to the government of Tanzania.
Indiana, which has a majority shareholding in Ntaka Nickel Holdings Ltd., delivered notices to Tanzanian authorities in 2020 over the amendments that effectively cancelled retention licenses issued prior to January 2018.
From 2018 to December 2019, the company actively engaged with the Tanzanian minister for minerals and the mining commission in an effort to resolve a suitable tenure mechanism for the project licence to be reinstated, it said in a statement.
As the majority shareholder in Ntaka Nickel Holdings, Nachingwea UK Ltd (NUK), both incorporated in the United Kingdom, and Nachingwea Nickel (NNL), incorporated in Tanzania, the award was $109.5 million to the claimants. Indiana is a 62.4% shareholder of the combined holdings of the claimants.
“I view this result as a complete victory, but in some senses is bittersweet, as this project could have built up regional infrastructure including roads, schools and medical clinics had it been able to proceed without unlawful expropriation,” Timothy Foden, partner at Boies Schiller Flexner, said in an emailed statement to MINING.COM.
LALIVE and Boies Schiller Flexner LLP, law firms that specialize in international arbitration, represented the claimants in the ICSID arbitration process.
“I am delighted that we have received the award from ICSID, and that the amount of the award reflects the substantial investment that has been lost by shareholders through Tanzania’s unlawful expropriation of Ntaka Hill,” Bronwyn Barnes, Indiana’s executive chairman, said in the statement.
“My message to shareholders has been consistent – we had a clear and compelling position to support our claim for compensation and have worked tirelessly for five years to ensure that we maintained our position with strength and determination.
“The ICSID Convention has been ratified by 158 Member States of the World Bank – including Tanzania. This means that any award issued by an ICSID tribunal is enforceable in any one of those 158 member states as if it were a judgment of one of their own courts,” Barnes said.
The junior explorer’s stock soared over 75% on the ASX Tuesday, with shares trading over 56 million times. Average daily volume is 1,264,803. The company has a A$38.6 million ($26.3m) market capitalization.
