African Consolidated Resources Plc (ACR) has vowed to challenge Monday’s High Court ruling, which cancelled its diamond mining claims in Chiadzwa on grounds the UK company had “fraudulently” acquired the mining rights.
The ruling reversed last year’s judgment that gave the diversified mining company rights over a concession area measuring 2 000 hectares – 2% of the alluvial diamond-rich area – questioning the method the company had used to acquire the concessions.
ACR’s lawyer Jonathan Samkange said the London-listed company would make an urgent appeal to the Supreme Court by today, upon receiving the written judgment from the court.
“If we get our hands on the judgment it will be easy to appeal by lunch hour tomorrow (today), we should have filed our papers” Samkange said.
“The whole thing is totally unacceptable. It’s not for the court to give the grounds for the cancellation but the (mining) commissioner. It really does not make sense.”
Legally, a miner should appeal claim losses to the Minister of Mines and Mining Development.
But Samkange said ACR could not do so since Obert Mpofu, the Minister of Mines and Mining Development, is, in his view, the “guilty” one.
“It is the minister who has cancelled the mining claims, how can we appeal to the same minister?”
In February, the Mines and Mining Development ministry cancelled ACR’s diamond title in Chiadzwa, Marange, in the eastern part of Zimbabwe, under Section 341 of the Mines and Minerals Act, questioning the validity of the company’s mining claims.
Government’s argument was that ACR fraudulently secured the mining concessions for unregistered investment vehicles, namely Dashaloo, Heavy Stuff, Olebile and Possession Investments.
The legal battle has dragged for three years, and seen rulings and counter-rulings being handed down by the High Court and lower courts.
In March 2006, the company successfully applied to acquire ground initially held by De Beers after the global diamond giant decided not to renew its EPOs when they expired the same month.
The same month, ACR pegged its concession area and commenced exploration and reported that it had discovered economic diamond deposits within the lamproite class.
But two months later, ACR was ejected while it was still moving its equipment to the site.
After temporarily returning to the site, the miner was eventually kicked out in November when the state declared Chiadzwa a reserve area and subsequently issued four special grants to the Zimbabwe Mining Development Corporation (ZMDC) – government’s mining investment vehicle – for a concession area measuring 66 448 hectares.
In November the following year, government authorised ZMDC to launch a diamond mining subsidiary, Marange Resources, to agree joint ventures with technical partners.
Exactly a year later, ZMDC struck two 50/50 partnership deals with The New Reclamation Group, which culminated in the incorporation of Mbada Diamonds and Canadile Miners.
ACR took government to court in 2007, challenging “illegal” eviction from Chiadzwa in November the year before, and citing the Minister of Mines and the Mining Commissioner, ZMDC and the Mineral Marketing Corporation of Zimbabwe (MMCZ) as respondents.
ACR won the case twice, in the magistrates and High courts in 2009, on grounds that the ground covered by its claims was open to exploration at the time it applied for the mining rights, and after government allegedly failed to demonstrate any illegal or improper pegging of claims by ACR.
The High Court judgment of September 25 last year ruled that government had “irregularly” granted ACR-held claims to ZMDC and MMCZ through special grants.
The judgment also ordered ZMDC out of the disputed concession area to make way for ACR to resume operations. But before the company could move in, the state challenged the ruling in Supreme Court.