Tanzania government faces second mining dispute

Dar es Salaam. A mining company linked to the United Kingdom and Northern Ireland has become the second investor to declare a dispute with the Tanzania government over a retention mining licence that was repossessed by the government for fresh bidding.  This comes in less than four days after another miner declared a row with the government over a disputed mining licence.

In the latest development, Indiana Resources Limited (ASX: IDA), announced yesterday that it had served a notice to the Tanzanian President, Attorney General and the Minerals ministry in relation to its Ntaka Hill Nickel Project Retention Licence.

On Wednesday, a Canadian firm, Winshear Gold Corporation, also announced it had delivered a similar notice to the Attorney General with the intention of establishing an investment dispute following the government’s decision on mining laws.

Tanzanian Minerals Commission (TMC) chairman Shukrani Manya told The Citizen on Tuesday that government organs were working on the matter raised by the Canadian firm. Yesterday, Indiana Resources issued a statement that it was taking measures to preserve its rights as a shareholder of Ntaka Hill Holdings Ltd (UK) which is the owner a project located in the Nachingwea District, Lindi Region.

It said, “Tanzania has breached obligations it owes to investors under the Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Government of the United Republic of Tanzania for the Promotion and Protection of Investments and international law.”

The firm’s chair, Bronwyn Barnes, said for the past 18 years the firm and its partners have worked with Tanzania in developing the Ntaka Project - and, to-date, in excess of AUD$60 million has been invested in defining the current resource and preparing development plans and studies.

However, the company claims that three years ago, the Tanzania government introduced “wide-ranging and severe” amendments to the Mining Act 2010 which, among other things abolished the legislative basis for the Retention Licence classification with no replacement classification.

The company said the investors have now notified Tanzania of the commencement of the six-month period, adding: “The Notice of Intent is necessary in order to preserve the Company’s rights to initiate arbitration should a resolution with the Tanzanian government not be reached. Indiana confirms that it is taking all necessary actions to preserve its rights as a shareholder of NNHL.