Canadian firm Montero Mining and Exploration Ltd this week became the third international mining company to reach an out-of-court settlement with Tanzania over licensing disputes, after Dodoma agreed to pay $27 million on Wednesday.

The resolution is expected to conclude a long-running case at the International Centre for the Settlement of Investment Disputes (ICSID), where Montero was seeking $70 million in compensation for the 2018 expropriation of its rare earth element project license at Wigu Hill in Tanzania's Morogoro region.

Over the past year, Tanzania has paid $120 million to two other aggrieved international miners who were also claiming damages at ICSID over similar licence expropriations.

In October 2023, the government made a one-time $30 million to Winshear Gold Corp, also of Canada, to settle a claim of at least $96 million for the cancellation of its retention licence for a gold mining project in southwestern Tanzania.

Again, in July this year, the country agreed on a $90 million settlement with Australian company Indiana Resources, after losing their arbitration battle over the revocation of another retention licence for nickel mining in the country.

The ICSID had already granted a $109 million award to Indiana after ruling in July 2023 that Tanzania's action was in breach of its bilateral investment treaties with Australia and Britain.

According to Montero, the payment schedule for the latest settlement will be spread over three months, with the first instalment of $12 million already received by the company.

A second instalment of $8 million is expected in January 2025 and the final tranche of $7 million before the end of February 2025."The settlement sum, which represents 39 percent of the $70 million initially claimed by Montero, obviates the need for a costly and time-consuming hearing, the risk of an adverse award, enforcement efforts, and finally concludes a near seven-year dispute," Montero said in a November 20 statement from its Toronto headquarters.

The company's president and CEO, Dr Tony Harwood, described the settlement as "amicable and allows both parties to move forward.""We wish Tanzania every success in attracting new mining investment," Dr Harwood added.

Montero said the two parties had sent a joint request to ICSID for suspension of the arbitration proceedings after the first payment was made, and would confirm discontinuation of the proceedings altogether "provided the final payment has been received by Montero."The company emphasised that the arbitration's formal conclusion was "conditional" on Tanzania’s compliance with the settlement agreement."This agreement does not provide for any security for the benefit of Montero in case Tanzania would not pay any instalment, in which case Montero can either resume the ICSID arbitration or seek enforcement of the settlement agreement," the statement said in what it described as a disclaimer.

Tanzania was hit by a string of arbitration cases at ICSID in 2018 after the government of the late John Magufuli began scrapping mining retention licences awarded to international investors at short notice.

The move followed the enactment of new mining laws the previous year with the stated intention of safeguarding sovereign control over the country's mineral resources.

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