Dar Es Salaam — In a significant resolution to a protracted legal battle, Tanzania has
reached an out-of-court settlement with Australian mining company Indiana Resources.
The agreement, finalized on July 29, stipulates that Tanzania will pay $90 million to end
arbitration proceedings at the International Centre for Settlement of Investment Disputes
(ICSID).
The settlement brings an end to a long-standing dispute over the expropriation of Indiana
Resources’ nickel mining license. In July 2023, ICSID had ruled that Tanzania unlawfully
seized the license and ordered the country to pay $109 million in compensation.
This award had accrued interest, bringing the total amount to $121 million by last week.
Indiana Resources, in a statement, highlighted that the settlement would save the
company from further expenses and delays associated with pursuing the full award.
The company emphasized that the decision was made in the interest of avoiding additional
costs and time.
Tanzania had delayed payment while seeking annulment of the ICSID award. The ongoing
proceedings at the World Bank-affiliated tribunal are expected to conclude only after the
settlement is fully paid.
The settlement terms dictate that Tanzania will make payments in three installments.
The first payment of $35 million has already been made, with subsequent payments of $25
million and $30 million due by October 25 and the end of March 2025, respectively.
Indiana Resources’ executive chairman, Bronwyn Barnes, stated that the company retains
the right to “recommence” the annulment process if Tanzania defaults on any installment
payments.
She also mentioned the potential for pursuing enforcement actions, which could include
the seizure of Tanzanian assets in jurisdictions that are members of the World Bank.
In anticipation of the settlement, the Australian Securities Exchange granted Indiana
Resources a temporary suspension of trading on its shares. The suspension, requested by
Indiana, was in effect until July 29.
This settlement marks the second instance where Tanzania has resolved disputes with
international firms following the controversial revocation of mining licenses by the
government of former President John Magufuli in 2018.
The settlement is seen as a move towards stabilizing the investment climate in Tanzania’s
mining sector.
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