Tanzania has finalized a $27 million settlement with Montero Mining regarding the Wigu Hill project. The payment was completed in installments, concluding an extensive legal dispute that began with the government’s expropriation of the project. Montero is exploring options for shareholder distribution of settlement funds post-review.
Tanzania has completed the final payment of $7 million to Montero Mining and Exploration Ltd, concluding a lengthy dispute related to the Wigu Hill rare earth element project. This payment finalizes a $27 million settlement that emerged from an extensive legal battle which began when the Tanzanian government took control of the project. The settlement was reached out of court in November 2023, significantly reducing Montero’s initial compensation request of $70 million to 39 percent of that amount, settled at $27 million.
The agreed payment plan involved three installments, starting with an initial payment of $12 million by November 2024. The rest, totaling $15 million, is due in two payments by January and February 2025, with the final payment scheduled for March 4, 2025. This resolution averts a protracted court procedure for Tanzania, eliminating the risks of an unfavorable ruling and potential enforcement complications.
Montero has reported an investment of approximately 15.5 million Canadian dollars since 2008 into the Wigu Hill project. Despite various attempts for an amicable resolution, Montero initiated arbitration proceedings with the International Centre for Settlement of Investment Disputes (ICSID), which will now be officially withdrawn.
Dr. Tony Harwood, President and CEO of Montero, conveyed satisfaction regarding the completion of the payment, noting its positive impact on the company’s finances. He indicated that the company is now looking into how to distribute the settlement funds to shareholders, including a possible return of capital. Any decisions regarding the distribution will follow an assessment of legal, taxation, and administrative costs, with an announcement anticipated by the second quarter of 2025.
Montero also intends to reserve a portion of the settlement funds for any unresolved expenses related to this dispute. Attempts to secure comments from relevant government officials were not successful.
In conclusion, the successful completion of the final payment signifies an end to a protracted legal battle between Tanzania and Montero Mining. The settlement not only resolves financial disputes but also allows both parties to move forward without the uncertainty of court proceedings. Montero’s management is now focused on future distributions to shareholders and ensuring the financial integrity of the settlement’s impact on ongoing operations.
Original Source: www.thecitizen.co.tz
