On 14th July 2023, the International Centre for Settlement of Investment Disputes (ICSID), a part of the World Bank, has concluded arbitration proceedings against the United Republic of Tanzania, resulting in a significant award against the country.
Indiana Resources Limited (ASX: IDA), the majority shareholder in Ntaka Nickel Holdings Ltd (NNHL), Nachingwea UK Ltd (NUK), and Nachingwea Nickel Ltd (NNL), collectively known as the “Claimants,” will receive over USD 109.5 million in compensation for the unlawful expropriation of the Ntaka Hill Nickel Project.
Indiana is the manager of the Joint Venture for the Project and has been leading activities to progress a Claim to Arbitration against the Government of Tanzania for the illegal expropriation and loss of the Ntaka Hill Nickel Project.
The ICSID Tribunal issued its ruling on 14th July 2023, unanimously declaring that Tanzania had unlawfully expropriated the Ntaka Hill Nickel Project on 10th January 2018.
The Tribunal’s decision was based on Tanzania’s violation of the UK-Tanzania Bilateral Investment Treaty (BIT).
In light of this violation, Tanzania has been ordered to pay the Claimants USD 76,706,461 in damages and additional losses.
Moreover, the Tribunal mandated compound interest at a rate of 2% above the USD Prime rate on the awarded amount, accruing from 10th January 2018 until the date of payment, bringing the total compensation to over USD 109.5 million at the time of the Tribunal’s Award.
Bronwyn Barnes, Executive Chairman of Indiana Resources, expressed her satisfaction with the ICSID’s decision, stating: “The conclusion of arbitration proceedings brings me great satisfaction, and I would like to sincerely thank those shareholders who have supported the Company during that time. We now move to the enforcement phase, and I will keep shareholders updated as we progress.”
Under the ICSID Rules, Tanzania has 120 days from the date of the Award to file an application for annulment; however, the Claimants believe that such a challenge is unlikely to succeed due to the limited grounds for annulment.
Nonetheless, Tanzania’s Attorney General, Judge Eliezer Feleshi announced that the government was proceeding with the appeal.
About the Ntaka Hill Nickel Project
The Ntaka Hill Nickel Project is a development-ready advanced nickel sulphide 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 licences for the Ntaka Hill Nickel Project through its 100% owned subsidiary Nachingwea Nickel Ltd.
The dispute arose when Tanzania-during the administration of former President Magufuli-issued a Retention Licence for the Ntaka Hill Nickel Project on 21st April 2015, which was later abolished in July 2017 without a replacement classification.
Subsequently, on 10th January 2018, Tanzania published the Mining (Mineral Rights) Regulations 2018, stating that all Retention Licences no longer existed, leading to the expropriation of the Ntaka Hill Project.
Indiana actively engaged with Tanzanian authorities to resolve the matter but was unsuccessful in reinstating the Project Licence.
