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Tanzanian Governments Reputation On The Line, After Major Win By Small OZ Resource Company.

The reputation of the Tanzanian Government is on the line today, after a small Australian Company Indiana Resources, that has access to rare earth minerals and gold, and as of Monday only had a net worth of $25M, won a Court hearing in New York that awarded them A$111 million in damages and losses, the African Government were also ordered to pay legal fees of A$5.6M.

Prior to the announcement by the arbitration tribunal the Companies shares were trading at $0.4 cents.

The African Government has not responded to the decision with questions now being raised as to whether the Government will actually pay the awarded settlement or appeal the decision.

The arbitration Tribunal unanimously ordered Tanzania to pay the Claimants US$76,706,461 in damages and additional losses, as well as compound interest at the rate of 2% above the USD Prime rate on the amount awarded from 10 January 2018 to the date of payment.The action was taken via the International Centre for Settlement of Investment Disputes (“ICSID”), some observers claim that the “failure to pay” would result in the business reputation of the Tanzanian Government being damaged with questions raised about future investments by Australian Companies in the region.

The Tribunal decided that the costs of the arbitration, including the fees and expenses of ICSID and the Tribunal, should also be borne by Tanzania.Indiana Resources Limited is a majority shareholder in Ntaka Nickel Holdings which is incorporated in the United Kingdom, and Nachingwea Nickel Ltd they are also the lead the manager of the Joint Venture and responsible for activities relating to the arbitration against Tanzania.

The Tribunal delivered its Award on 14 July 2023, and unanimously found that Tanzania had unlawfully expropriated the Ntaka Hill Nickel Project (“Ntaka Hill”) on 10 January 2018 in breach of the UK-Tanzania Bilateral Investment Treaty (“BIT”).

As a result of the win in the South Australian business is now moving to enforce their win and collect their settlement.

ComExecutive Chair Bronwyn Barnes, said “The ICSID Convention has been ratified by 158 Member States of the World Bank – including Tanzania. This means that any award issued by an ICSID tribunal is enforceable in any one of those 158 member States as if it were a judgment of one of their own courts. We have consistently said that we would look to enforce an award against Tanzania, and that work will commence now on collecting the award”.

The problems for the Australian Company started to unfold on the 21 April 2015, when the Tanzanian Government issued a Retention Licence for the Project, covering the same area as the Ntaka Hill Prospecting Licence, for a period of 5 years.

Executive chair Bronwyn Barnes

In July 2017, the Government of Tanzania amended the Mining Act 2010 by, inter alia, abolishing the legislative basis for the Retention Licence classification with no replacement classification.

On 10 January 2018, Tanzania published the Mining (Mineral Rights) Regulations 2018, which made it clear that all Retention Licences no longer existed and that the underlying rights over all areas under Retention Licences, including the Retention Licence held for the Project, reverted to the Government of Tanzania.

Between January 2018 to December 2019, the Company actively engaged with the Tanzanian Minister for Minerals and the Mining Commission in an effort to resolve a suitable tenure mechanism for the Project Licence to be reinstated.

At all times Tanzanian Government representatives reassured the Claimants’ representatives, as well as Indiana Board members that visited Tanzania for the purpose of collaborative engagement with the Government, that their historical investment would be recognised and that their rights would be respected and protected.

On 19 December 2019, the Mining Commission of Tanzania announced a public invitation to tender for the joint development of areas covered previously by Retention Licences.