Montero Mining has received the final $7 million from Tanzania, concluding a $27 million settlement over the seized Wigu Hill project. The settlement resolves a protracted legal battle that began with the government’s expropriation. Montero initially sought $70 million but agreed to a lesser amount. The company plans to address legal costs and may distribute settlement funds to shareholders.
Tanzania has finalized a $7 million payment to Montero Mining and Exploration Ltd, thereby concluding an extensive legal dispute regarding the Wigu Hill rare earth element project. This settlement, amounting to $27 million, terminates a lengthy confrontation that commenced when the Tanzanian government took control of the project. Initially, Montero sought $70 million in compensation, but the matter was settled out of court in November 2023.
The agreement entails that Tanzania pays Montero a total of $27 million, representing approximately 39 percent of Montero’s original claim. The payment schedule comprises three installments: $12 million was expected by November 2024, while the remaining $15 million is scheduled for payment in January and February 2025, with the final amount due on March 4, 2025. This settlement enables Tanzania to avoid a protracted court case and the possible repercussions of an adverse ruling.
Since 2008, Montero has invested around 15.5 million Canadian dollars into the Wigu Hill project. Despite various efforts to amicably settle the dispute, Montero resorted to filing an investment arbitration claim with the International Centre for Settlement of Investment Disputes (ICSID), which will now be withdrawn following the settlement.
Dr. Tony Harwood, Montero’s President and CEO, expressed his contentment regarding the prompt finalization of the payment. He remarked that the company is now in a suitable position to address the financial implications of the settlement, including covering legal costs and other related expenses. Montero is also evaluating the best approach for distributing the settlement proceeds to shareholders, potentially considering a capital return.
A final decision on the distribution of funds is anticipated after a thorough internal assessment of legal, taxation, and administrative costs, with an update expected in the second quarter of 2025. A portion of the funds will be retained for any outstanding expenses associated with the dispute, which Montero will manage moving forward. Attempts to solicit comments from the Attorney General and other officials were unsuccessful.
In conclusion, Tanzania’s payment of the final $7 million to Montero Mining marks the resolution of a significant legal dispute regarding the Wigu Hill project. The settled amount of $27 million illustrates a compromise from the initial $70 million claim, allowing both parties to avoid protracted legal proceedings. Montero is now poised to manage the financial outcomes of this agreement and consider options for shareholder distribution. This conclusion signifies a new chapter for both Montero and the Tanzanian government.
Original Source: www.thecitizen.co.tz
