- Montero Mining and Exploration Ltd has received the final $7M installment of a $27M settlement with Tanzania, resolving a long-standing dispute over the expropriation of its Wigu Hill rare earth project.
- While this payment marks the conclusion of the legal battle, Montero noted that final legal costs and expenses must still be determined before net proceeds can be confirmed.
- The company is now evaluating the distribution of funds and expects to provide an update on potential shareholder payments by Q2 2025.
Montero Mining and Exploration Ltd has confirmed receiving $7,000,000, being the final instalment in a US$27,000,000 settlement between the Company and Tanzania. Paid in cash, the final Instalment brings to an end the long standing dispute between the company and the East African country where it has mining operations.
Notably, the amount accounts for approximately 39 per cent of Montero’s initial $70 million claim in a legal battle that stems from expropriation of Montero’s Wigu Hill rare earth element project in Tanzania. The case was heard before the International Centre for Settlement of Investments Disputes (ICSID).
However, in an update, the mining company said the ‘final instalment’ remains due. “The final net proceeds to be received by the Company is not certain at this time as final legal costs and other expenses Montero incurred in connection with defence and settlement of the expropriation will now be determined as the Final Instalment has been received,” Montero’s communique states in part.
The company added that now that the final instalment has been received, it is now moving in to finalize its analysis with respect to the distribution of funds, including any potential payment to shareholders of the company. “The company expects to announce an update on its distribution plans during Q2 2025.”
In his comments following the final instalment, Dr. Tony Harwood, President and CEO of Montero said: “I am pleased Montero has timely received the third and final payment of US$7,000,000 from Tanzania.”
The row was put on ice after Montero and Tanzania jointly requested the arbitral tribunal to suspend the ICSID proceedings after receiving the first settlement payment. “On receipt of the final instalment, the parties will formally request the tribunal to discontinue the ICSID arbitration in its entirety,” the communique added.
The CEO reassured stakeholders that “Montero is considering all options with respect to the distribution of the settlement proceeds, including but not limited to a return of capital distribution to shareholders. The exact amount of any distribution and the method of such distribution is yet to be determined and will be subject to accounting review and board approval,” he clarified.
He also went on to detail that pending the distribution, noting that it should be clear that Montero will retain funds to cover legal, taxation, and administrative expenses. “Further announcements will be made in due course,” he concluded.
The first payment of $12 million was received on 20 November 2024 and shared between Montero and Omni Bridgeway, the representing legal firm. The second instalment of $8 million is was made by 31 January 2025 and was allocated to Montero and for the settlement of the related legal fees.
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Montero: Next chapter
With the close of this chapter, the company says it is now focusing on advancing the Avispa copper-molybdenum project in Chile and is seeking a joint venture partner. Montero, which trades on the TSX Venture Exchange under the symbol MON says it has 50,122,975 shares outstanding.
“I am pleased Montero successfully achieved an amicable distribution of proceeds of over C$20,000,000. We wish Tanzania success in attracting new mining investments and look forward to receiving the final two payments due within the next five weeks. Further notice of payments received will be forthcoming,” summed up Montero CEO and president Tony Harwood.
Rare elements mining in Tanzania
“In Tanzania, a new dawn that’s ready to fuel the global energy transition, rare elements,” comments a review by the US Trade Department.
Mining is a leading industrial sector in Tanzania, which contributes largely to it’s GDP; 2.5 per cent from 2018 to 2021 and then jumping to 7.3 per cent from 4.8 per cent.
According to the review, the mining sector generates over $2.5 billion annually and accounts for approximately 50 per cent of exports by value.
While Tanzania is already famous for its gold, silver, tanzanite, iron ore, copper, nickel, cobalt, graphite, and uranium, the country now boasts a wide expanse of approximately 24 rare earth elements and critical minerals currently in exploration.
“As the energy transition takes hold, the demand for rare earth elements and critical minerals is ever-increasing,” details the review. Tanzania is well poised to meet this demand, and already, mineral exploration in several parts of the country is underway.
“In recent years, the sector has attracted new foreign direct investment in mineral development exploration, and local investment has surpassed $1 billion,” it further expounds.
According to the review, the government of Tanzania intends to increase mineral earnings by 33 per cent over the next three years, marking a revenue increase of up to $302 million between 2023 and 2024. “With such ambitious plans, the foundation has been established for Tanzania to see a boom in its mining fortunes,” the authors note.
It further estimates that the sector will reach $6.6 billion in value by 2027.
More importantly, in addition to mining the minerals, this emerging sector provides opportunities to capture more value from critical minerals before exporting, by establishing mineral processing centers within the country.
The review says there are potential opportunities for U.S. firms to capitalize on including supply of key mining infrastructure, services and equipment such as excavators, bulldozers, crushers and minerals scanning/imaging technology.
