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InDABA ReVIeW

Bronwyn Barnes

tween the Government and Barrick should rights of our shareholders and the historical
pave the way for a reinvigoration of the sec- investment they and our JV partners – cur-
tor, according to EcoGraf Ltd managing di- rent and historical – have made in Ntaka Hill.
rector Andrew Spinks. It is a significant asset, one of the most ad-
“This is about breaking the deadlock. vanced undeveloped nickel sulphide plays
Both sides have called it an historical land- in the world. We are not walking away, and
mark agreement and I think that did reso- we are focused on reaching an amicable
nate at Mining Indaba,” Spinks told Paydirt. outcome with the Government.
Walkabout Resources Ltd executive di- “The compensation we would pursue
rector Allan Mulligan said the settlement would be a significant number which recog-
was already being acknowledged during the nises the historical investment and valuation
company’s meetings with investors. of the asset at the time of expropriation.”
“In general, an acknowledgement that the Luttrell said the cancellation of the reten-
perceived risk profile of investing in Tanza- take time for investors to warm to Tanzania. tion licences – Barrick and Glencore saw
nia is now receding,” Mulligan told Paydirt. “Regardless of the intention, what Tanza- their JV over the Kabanga nickel project
“African banks in particular, have shared an nia did in 2017 was so rare and radical that also cancelled – appeared to be an example
interest in including Tanzanian mining pro- it is now in a challenging position in terms of direct expropriation.
jects into their portfolio.” of promoting itself to mining investors. It al- “Those retention licences are invest-
Speaking at Mining Indaba, Nyongo said most doesn’t matter what the laws say, the ments as defined under almost every bilat-
the legal reforms introduced by Magafuli in fact that such radical laws were passed is eral investment treaty [BIT] in the world,” he
2017 were designed to improve the min- enough to do lasting reputational damage.” said. “All BITs make reference to business
ing sector’s contribution to the Tanzanian While the agreement brings an end to
economy and improve the investment envi- negotiations over the future of Barrick’s Allan Mulligan
ronment. three gold mines in the country, legal battles
Mulligan said the settlement was proof of could still occur elsewhere in Tanzania. As
a willingness on both sides to move forward part of the 2017 amendments, 10 retention
in partnership however he expressed con- licences were cancelled. The licences were
cerns over the meaning of the oft-quoted longstanding projects previously deemed of
“50/50 shared economic benefit” of the potential significance to the country.
agreement. Among the licences cancelled was the
“The desire by Government is that 50% Ntaka Hill nickel project licence, held by
of the gross revenues from mining as an ag- ASX-listed Indiana Resources Ltd.
gregate remain in country through expendi- Indiana and its various JV partners had
ture on local costs, salaries, wages, servic- spent more than $US60 million over more
es including taxes, duties and fees,” he said. than a decade on exploration and devel-
“This is not a difficult hurdle for locally reg- opment studies at Ntaka Hill. Chairperson
istered mining companies to achieve since Bronwyn Barnes said the company was
money must be spent where the operation pursuing its legal rights in relation to the li-
is geographically bound. The 16% free-car- cence. concessions to search for natural resourc-
ried interest has now been clearly defined In late January, Barnes said in an ASX es. If that licence is annulled or revoked by
and we accept that as a reasonable and statement that Indiana had “moved quickly legislative or executive act, that is deemed
passive recovery on behalf of the people for to protect the interests of shareholders”. direct expropriation.
depletion of the national endowment.” “This is not an approach by a government “The legal question is fairly simple: were
Luttrell said the severity of the Govern- that encourages foreign investment and is a the licence holders paid prompt, adequate
ment’s original changes meant it may still clear signal that funds invested in Tanzania and effective compensation, was the annul-
are at risk of sudden ment done in accordance with the norms of
and inappropriate sei- due process, was it non-discriminatory and
zure by the Govern- was it done for a legitimate public purpose.
ment,” Barnes said. Only if the answer to all of those questions is
Speaking to Pay- yes will the expropriation be lawful. If the ex-
dirt in February, propriation is unlawful the government has
Barnes said she was to pay damages”.
“beyond disappointed Luttrell said Indiana’s pursuit through in-
with the situation” and ternational arbitration was clear proof of the
would be pursuing its importance of BITs.
legal case through “Indiana structured its investment the right
subsidiary Ntaka Hill way,” he said. “I think it shows that structur-
Holdings Ltd which is ing your investment so you have a BIT to in-
registered in the UK. voke gives you recourse that you otherwise
“We have some wouldn’t have if you got expropriated. It is
protection under the recourse to a forum the host state does not
UK-Tanzania bilateral and cannot control.”
investment treaty,”
she said. “We are – Dominic Piper with Reuters
seeking to protect the
Stanslaus Nyongo

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