Tanzania’s final $7 million payment to Montero Mining completes a $27 million settlement over the Wigu Hill project dispute. This agreement concludes a long legal struggle initiated by the government’s expropriation, with Montero’s original claim for $70 million reduced significantly. The settlement enables Montero to address expenses and consider shareholder distributions after a review.
Tanzania has completed a final payment of $7 million to Montero Mining and Exploration Ltd, concluding a protracted legal battle over the Wigu Hill rare earth project. This settlement, amounting to $27 million, stems from the Tanzanian government’s earlier expropriation of the project, which Montero challenged by seeking $70 million in compensation.
The payout was structured in three installments, with Montero expecting $12 million by November 2024 and the remainder of $15 million to be distributed by early 2025, culminating on March 4, 2025. Settling the dispute out of court mitigates risks associated with a lengthy legal process and possible unfavorable rulings.
Montero, having invested approximately 15.5 million Canadian dollars into the project since 2008, had resorted to filing a claim with the International Centre for Settlement of Investment Disputes (ICSID), which will now be withdrawn as part of the settlement.
CEO Dr. Tony Harwood expressed satisfaction with the completion of the settlement, noting the company’s ability to address legal and other expenses related to the dispute. Furthermore, Montero is contemplating distributing the settlement funds to shareholders, which may involve capital return; however, this decision will depend on a thorough review of related costs.
The company will reserve some settlement funds for any outstanding expenses from the legal dispute. Efforts to obtain comments from Tanzanian legal officials were not successful.
The conclusion of the settlement between Tanzania and Montero Mining ends a lengthy legal battle regarding the Wigu Hill project. The Canadian firm successfully negotiated a payment of $27 million, reflecting a significant reduction from their original compensation demand. Looking forward, Montero plans to review options for distributing settlement funds to shareholders while ensuring coverage of outstanding legal costs, maintaining a focus on financial clarity and responsibility.
Original Source: www.thecitizen.co.tz
