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Indiana Resources Updates on Tanzanian Dispute

18 December 2023 09:11
ASX:IDA

Indiana Resources Limited (ASX: IDA) has announced an update on the ongoing dispute with the United Republic of Tanzania, which was the subject of arbitration at the International Centre for Settlement of Investment Disputes (ICSID).

An Ongoing Legal Dispute

In November, the ICSID ad hoc Committee reached a decision regarding the Stay of Enforcement of the Tanzanian Award, requiring the Tanzanian government to pay the full award amount, which as of November had risen to $117,180,000 USD, to the Claimants within 45 days of the completion of the hearing.

The group of Claimants consists of Ntaka Nickel Holdings Ltd, Nachingwea UK Ltd, and Nachingwea Nickel Ltd, where Indiana holds a 62.4% majority stake, putting the Company in line to receive significant financial compensation.

Update on Proceedings

On the 13th this month, Tanzania submitted a letter to the ad hoc Committee of the Tribunal with an undertaking by the Attorney General of Tanzania, however, the Committee advised that this undertaking did not comply with the Committee’s Decision on the Stay of Enforcement of the Award made in October 2023.

The stay of enforcement requires Tanzania to undertake:

  1. That Tanzania will, in accordance with its obligations under the ICSID Convention, recognise the Award as final and binding and will abide by and comply with the terms of the Award.
  2. That Tanzania will not subject payments to any enforcement proceedings or to the scrutiny of Tanzanian courts.
  3. That Tanzania will unconditionally and irrevocably pay the full amount of the Award (including interest) to the Claimants within 45 days following the notification by the ICSID Secretariat of the Committee’s Decision on annulment.

If Tanzania fails to provide an undertaking complying with the Committee’s Stay Decision by 19 December 2023, and has not lodged appropriate financial security as stipulated, the ad hoc Committee will immediately declare the stay terminated.

History of the Dispute

In July, Indiana initiated arbitration proceedings against Tanzania with the ICSID. Following the tribunal’s decision in favour of Indiana, the Tanzanian government is now required to compensate the involved Claimants with an amount exceeding $109.5 million USD, in addition to accrued interest and costs.

This legal dispute revolves around allegations that the Tanzanian government engaged in an unlawful expropriation of the Ntaka Hill Nickel Project on January 10, 2018, which constitutes a breach of the UK-Tanzania Bilateral Investment Treaty (BIT).

Further background and a timeline of the dispute can be found on Indiana’s website: here.

Accruing Interest

The initial Award amounted to $76,706,461 USD in damages and additional losses, with an interest rate set at 2% above the USD Prime rate, and legal costs for the Claimants totaling $4,113,581.07 USD, resulting in a total of $113,603,591.83 USD as of August 17.

Following the Tanzanian Government’s appeal on the Award, the costs have risen to $117,180,000 USD, which Tanzania is required to pay to the Claimants within 45 days.

Looking Ahead

In the midst of this ongoing legal battle, Indiana Resources has remained committed to advancing its exploration endeavours.

Boasting a diverse tenement portfolio encompassing rare earths, gold, and base metals, Indiana strategically situates itself across 5,713 square kilometres in the Central Gawler Craton Province of South Australia, strategically positioned between the historical gold mining centres of Tunkillia and Tarcoola.

In line with its historical focus on gold, the Company is now preparing for a focused rare earth elements (REE) drilling program.

IDA’s Australian Stock Exchange-listed share price has risen 4.84% and is currently trading at $0.065 (8.50am UTC+ 8 hours).

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