Tanzania has completed a final $7 million payment to Montero Mining, resolving a $27 million settlement over the expropriation of the Wigu Hill project. The settlement ends a long legal battle that began when the government seized control of the project. Montero’s investment and future distributions to shareholders are also addressed in the settlement.
Tanzania has successfully completed the final payment of $7 million to Montero Mining and Exploration Ltd, concluding a prolonged legal dispute over the Wigu Hill rare earth element project. This payment is part of a $27 million settlement that emerged following the Tanzanian government’s expropriation of the project, which initiated the legal battle.
The settlement was reached in November 2023, reducing Montero’s original compensation demand of $70 million to approximately 39 percent of that amount. The government’s payment plan involved three installments, with Montero having received $12 million by November 2024, and the subsequent $15 million to be paid in early 2025.
Finalizing this settlement has allowed Tanzania to avoid potentially lengthy court proceedings and the risks associated with an adverse ruling. Montero had previously invested around 15.5 million Canadian dollars in the Wigu Hill project since its establishment in 2008, and despite efforts to amicably resolve the matter, an investment arbitration claim was filed with the International Centre for Settlement of Investment Disputes (ICSID), which will now be discontinued.
Dr. Tony Harwood, Montero’s President and CEO, expressed his satisfaction with the timely payment completion, stating that the company is now in a position to address the financial implications, including legal expenses during the dispute. Additionally, Montero is evaluating options for distributing the settlement funds to shareholders, considering a capital return distribution, with a decision expected in the second quarter of 2025. Remaining funds will be retained to cover related expenses moving forward.
In conclusion, Tanzania’s final payment of $7 million to Montero Mining marks the end of an extended dispute regarding the Wigu Hill project. This settlement not only mitigates the risks of protracted legal challenges but also enables Montero to manage its financial obligations related to the agreement. Shareholder distributions are being considered, enhancing the company’s financial outlook moving forward.
Original Source: www.thecitizen.co.tz
