Tanzania has reached an out-of-court settlement with Australian mining company Indiana Resources, agreeing to pay $90 million to end arbitration proceedings at the International Centre for Settlement of Investment Disputes (ICSID).

This potentially ends the long-running dispute, although the settlement amount is less than the $109 million award that ICSID had ordered Tanzania to pay Indiana in July 2023, after ruling that it had unlawfully expropriated the company's licence to conduct nickel mining operations in the country. 

Read: Australian firm wins $109m compensation against Tanzania

Indiana said in a statement that the deal would save the company from incurring more time and costs in pursuing the payment of the full award, which had increased to $121 million by last week as interest continued to accrue at the rate of $1 million per month.

Tanzania had delayed payment as it sought annulment of the award in lengthy proceedings at the World Bank-affiliated tribunal which, according to Indiana, will only be concluded once it receives the full settlement sum.

Under the agreement reached on July 29, payment modalities will be in three instalments, with the first sum of $35 million already paid by Tanzania.

Another $25 million is expected by October 25, and the final disbursement of $30 million by the end of March 2025.

Indiana Resources executive chairman Bronwyn Barnes said the company reserved the right to "recommence" the annulment process at ICSID "if for any reason Tanzania defaults on the agreed subsequent instalment payments."

"This includes our right to pursue enforcement activities, which would involve the seizure of Tanzania’s assets in any jurisdiction that is a member of the World Bank,” Ms Barnes added.

Earlier this month, the Australian Securities Exchange granted Indiana Resources' request for a temporary suspension of trading on its shares on the bourse in anticipation of the expected settlement with Tanzania. 

The deadline for the suspension was July 29.

This was the second such settlement between Tanzania and international firms that filed for ICSID arbitration after their mining licences were controversially revoked by the John Magufuli government in 2018.

In October 2023, Tanzania made a one-time $30 million payment to Canadian firm Winshear Gold Corp to conclude their case out of court.

Read: Mining firms in Tanzania on the spot over royalty fees

The Vancouver-based company was claiming at least $96 million in damages for the expropriation of its retention licence for a goldmining project in southwestern Tanzania.

A third company, Montero Mining and Exploration Ltd also of Canada, is currently suing Tanzania at the ICSID for $67 million for compensation after its licence to operate a rare earth element project in Morogoro region was cancelled.

The case is pending at the Washington DC-based tribunal, with the last mention in January this year.

The Magufuli administration based its actions on new mining laws that scrapped retention licences for foreign investors, with the stated intention of safeguarding sovereign control over Tanzania's mineral resources.