Montero Mining completed a US$27 million settlement with Tanzania regarding the Wigu Hill project expropriation. The settlement resolves a long dispute, with payments structured in three installments finishing by March 2025. The company plans to distribute settlement funds to shareholders after assessing relevant legal and financial considerations.
Montero Mining and Exploration Ltd. has announced the successful completion of a final payment of US$7 million from the Tanzanian government, concluding a long-standing conflict regarding the expropriation of the Wigu Hill rare earth element project. This settlement, amounting to US$27 million, effectively resolves an extensive legal dispute initiated when Tanzania assumed control of the Wigu Hill project.
The agreement, made out of court in November 2023, stipulated that Tanzania would pay Montero US$27 million, approximately 39% of the original US$70 million sought by Montero as compensation. The payment plan consists of three installments, with the initial US$12 million due by November 2024, followed by two further payments totaling US$15 million, scheduled for January and February 2025, culminating on 4th March 2025.
The resolution of this dispute eliminates the potential for lengthy judicial proceedings for Tanzania, mitigates the risk of an unfavorable court ruling, and alleviates the complications involved in enforcing any potential judgment. Montero has invested about 15.5 million Canadian dollars into the project since 2008.
Prior to reaching this settlement, Montero resorted to filing an investment arbitration claim with the International Centre for Settlement of Investment Disputes (ICSID), which is now to be formally dismissed. Dr. Tony Harwood, President and CEO of Montero, expressed his satisfaction regarding the timely receipt of this settlement.
Moreover, the company is exploring various options for distributing the settlement funds to shareholders, including the potential for a capital return. A formal decision will be reached post an internal analysis of legal, taxation, and administrative costs, with announcements anticipated in the second quarter of 2025. Montero will also retain a portion of the funds to cover any outstanding expenses related to the dispute moving forward.
Attempts to obtain comments from the Attorney General, his deputy, and the Solicitor General were unsuccessful.
In conclusion, Montero Mining and Exploration Ltd. has successfully settled a long-standing dispute with the Tanzanian government for US$27 million, concluding a protracted legal battle over the Wigu Hill project. This settlement, which represents only a fraction of the original claim, allows both parties to avoid further legal complications. Montero is now set to manage the financial implications of the settlement and explore options for shareholder distribution in the near future.
Original Source: africanminingmarket.com
