Tanzania has completed a US$27 million settlement with Montero Mining, concluding a dispute over the Wigu Hill project. The agreement was finalized in November 2023 after Montero initially sought US$70 million. Payments will be made in three installments, with the final payment due by March 2025. Montero plans to distribute funds to shareholders while retaining some to cover remaining expenses.
Montero Mining and Exploration Ltd. has confirmed the final payment of US$7 million from the Tanzanian government, successfully concluding a prolonged dispute regarding the Wigu Hill rare earth element project. This settlement, amounting to US$27 million, resolves a legal conflict that began following the government’s seizure of the project. The agreement was finalized out of court in November 2023, despite Montero initially seeking US$70 million in compensation.
Under the terms of the settlement, the final payment will be issued in three installments. Montero will receive US$12 million by November 2024, with the remaining US$15 million to be disbursed by January and February 2025, culminating with the last payment on March 4, 2025. This resolution circumvents a protracted court process, reducing the risks associated with potential negative rulings and enforcement complications.
Since its inception in 2008, Montero has invested roughly 15.5 million Canadian dollars in the Wigu Hill project. They had previously attempted to negotiate a resolution amicably, but after reaching an impasse, Montero initiated arbitration proceedings with the International Centre for Settlement of Investment Disputes (ICSID), which will now be discontinued.
Dr. Tony Harwood, President and CEO of Montero, expressed his contentment regarding the settlement completion: “I am pleased Montero has timely received the third and final payment of US$7 million from Tanzania.” He noted that the company is in a position to address the financial implications of the settlement, including covering legal fees and associated costs.
Montero is also reviewing options for distributing the settlement proceeds to shareholders, which may include capital return distributions. A definitive announcement regarding this distribution will be made after an internal assessment of relevant legal, taxation, and administrative expenses, anticipated in the second quarter of 2025. Furthermore, Montero plans to retain a portion of the settlement funds to manage any remaining liabilities related to the dispute.
The settlement between Montero Mining and the Tanzanian government represents a significant resolution to a long-standing conflict concerning the Wigu Hill project. The phased payment plan mitigates potential legal risks, while Montero prepares for an appropriate distribution of funds to its shareholders. This resolution not only marks a financial milestone for Montero but also promotes a more stable investment environment in Tanzania.
Original Source: africanminingmarket.com
