Tanzania Concludes $7 Million Payment to Montero Mining, Resolving Legal Dispute
Tanzania has finalized a $7 million payment to Montero Mining, concluding a $27 million settlement resulting from the legal dispute over the Wigu Hill project. Montero had originally claimed $70 million following the project’s expropriation. The settlement includes payments scheduled through early 2025 and allows Montero to explore shareholder benefits stemming from these funds.
Tanzania has successfully completed the final payment of $7 million to Montero Mining and Exploration Ltd, culminating the resolution of a longstanding legal contention regarding the Wigu Hill rare earth element project. Initially, Montero sought $70 million in compensation after the Tanzanian government expropriated the project. However, the parties reached a settlement of $27 million, representing approximately 39 percent of the original claim, which was finalized out of court in November 2023.
As part of the settlement agreement, Tanzania’s payments were structured into three installments. Montero received an initial $12 million by November 2024, while the remaining two payments of $15 million were scheduled for release in January and February of 2025, concluding with the last installment on March 4, 2025. This arrangement averts the need for protracted court proceedings and their inherent risks.
Since its inception in 2008, Montero has invested around 15.5 million Canadian dollars in the Wigu Hill project. In pursuit of a resolution, Montero previously filed for investment arbitration with the International Centre for Settlement of Investment Disputes (ICSID), which will now be formally withdrawn. Montero’s President and CEO, Dr. Tony Harwood, conveyed his satisfaction regarding the timely completion of the settlement, emphasizing the company’s subsequent efforts to address financial obligations arising from the dispute.
Montero is also contemplating how to allocate the settlement funds amongst its shareholders, potentially including a return of capital distribution. A definitive decision will follow a thorough evaluation of legal, tax, and administrative costs, with the announcement projected for the second quarter of 2025. Furthermore, the company plans to retain a portion of the settlement fund to manage any outstanding expenses linked to the dispute, which will fall under Montero’s future responsibilities.
In summary, the completion of the $7 million payment by Tanzania to Montero Mining signifies the resolution of a significant legal conflict regarding the Wigu Hill project. This agreement alleviates the need for further legal action while allowing Montero to redirect its focus on financial and shareholder considerations. The resolution underscores the importance of amicable negotiation in international business disputes and sets a precedent for future interactions between governments and foreign investors.
Original Source: www.thecitizen.co.tz
