Indiana Resources Limited (ASX: IDA) has reached a US$90 million settlement agreement with the United Republic of Tanzania, resolving a long-standing dispute over the Ntaka Hill Nickel Project.
The settlement, representing 82.5% of the original US$109 million International Centre for Settlement of Investment Disputes (ICSID) award, will be paid in three installments: US$35 million already received, US$25 million due by 25 October 2024, and US$30 million by 30 March 2025.
Indiana Resources’ Executive Chairman Bronwyn Barnes stated: “I am very pleased to have concluded this settlement on behalf of the Claimants with representatives from the Government of Tanzania. Following the cancellation of our licence for the Ntaka Hill Nickel Project in January 2018, we have pressed our claim for compensation for the loss of our investment in Tanzania.”
The settlement concludes a nearly seven-year dispute, avoiding further costly arbitration and enforcement proceedings.
From the first installment, approximately US$23 million will repay the litigation funder and legal expenses. Indiana Resources has received an initial AU$10 million to reduce an intercompany loan, which will fund exploration activities at its South Australian assets and cover corporate expenses.
The final ICSID annulment hearing took place in Washington DC on 26 July 2024. The parties will request suspension of the annulment proceedings pending settlement completion. If Tanzania defaults on future payments, the Claimants can resume annulment proceedings or refer the matter to arbitration under the London Court of International Arbitration Rules.
Indiana Resources plans to make shareholder distributions following the settlement, with the first distribution proposed for December 2024 and the second in Q2 2025. The exact amounts will be announced after the October 2024 installment is received.
Barnes added: “This settlement clearly demonstrates Tanzania’s commitment to work with international mining investors to resolve historical disputes. I am confident that Tanzania will fully abide by the terms of the settlement and that the remaining installment payments will be made in compliance with the agreed terms.”
With this settlement, Indiana Resources aims to refocus on exploration activities at its Central Gawler Craton Project in South Australia while determining mechanisms to return funds to shareholders.
The Ntaka Hill Nickel Project Dispute
The Ntaka Hill Nickel Project is a development-ready advanced nickel sulfide project in southern Tanzania with estimated Mineral Resources of 56.2mt @ 0.63% Ni, 0.14% Cu, 0.02% Co for 356,380t of contained nickel1, JORC (2012).
Indiana is the major shareholder of Ntaka Nickel Holdings Ltd and Nachingwea UK Ltd (both incorporated in the United Kingdom) which historically held the licenses for the Ntaka Hill Nickel Project through its 100% owned subsidiary Nachingwea Nickel Ltd.
The project became the center of international arbitration after the Tanzanian government, under the administration of former President Magufuli, abolished the Retention Licence without offering a replacement classification. This led to the project’s expropriation in January 2018, sparking the legal challenge that culminated in the ICSID’s ruling.
In February 204, the ICSID ordered Tanzania to compensate Indiana Resources and its associated entities over USD 109.5 million for the unlawful expropriation of the Ntaka Hill Nickel Project.
