In the latest development about the Ntaka Hill Nickel Project, the International Centre for Settlement of Investment Disputes (ICSID) has made a crucial decision regarding the United Republic of Tanzania’s request to annul a substantial arbitration award.
The award, which was initially decided in July 2023, ordered Tanzania to compensate Indiana Resources Limited and its associated entities over USD 109.5 million for the unlawful expropriation of the Ntaka Hill Nickel Project.
The ICSID, a division of the World Bank, has now ruled that the majority of Tanzania’s grounds for annulment of the award are “manifestly without legal merit.”
This decision significantly narrows the scope of Tanzania’s challenge to the original ruling, which found the country in violation of the UK-Tanzania Bilateral Investment Treaty (BIT) due to its actions against the Ntaka Hill Nickel Project.
In a detailed press release, Indiana Resources Limited (ASX: IDA) revealed that two out of three grounds for annulment presented by Tanzania were struck down by the ad hoc Committee.
These included allegations of the Tribunal’s manifest excess of powers, failure to state reasons for the award, and a serious departure from a fundamental rule of procedure regarding cost allocation.
The proceedings will now focus solely on the remaining complaint concerning procedural departures.
The total compensation, including damages, additional losses, and accrued interest, now stands at USD 120 million, with interest continuing to accrue at approximately USD 1 million per month. This financial burden highlights the significant stakes involved as Tanzania navigates its next steps in the legal battle.
Bronwyn Barnes, Executive Chairman of Indiana Resources, expressed optimism following the Committee’s decision, urging Tanzania to recognize the futility of further delays and fulfill its compensation obligations.
This sentiment echoes her previous satisfaction with the Tribunal’s decision in July 2023, marking a consistent stance on seeking justice for the expropriation of the Ntaka Hill Nickel Project.
The Ntaka Hill Nickel Project
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.
Indiana actively engaged with Tanzanian authorities to resolve the matter but was unsuccessful in reinstating the Project Licence.