The High Court has cancelled the mining licence of the legal owners of the Chiadzwa diamond mining site, African Consolidated Resources (ACR), in the latest twist in Zimbabwe's diamond saga.

The Court this week rescinded a judgement it made last year which had confirmed ACR's title rights to the Chiadzwa claim. In September 2009, High Court judge Charles Hungwe ruled that the title belonged to ACR, after the company was forced off the site at gunpoint in 2006.

At that time the parastatal Zimbabwe Mining Development Corporation (ZMDC) took over, joining forces with two South African owned companies to mine the diamond site. UK based ACR has been embroiled in a legal battle ever since, trying to reclaim their mining rights.

The ZMDC together with its partners firms, Mbada Investments and Canadile Miners, continued mining the site regardless of the legal fight, collecting a multi million dollar stockpile of diamonds for sale. The mining operations have been in contempt of the High Court's 2009 ruling and another ruling from the Supreme Court, which ordered all mining activities to cease, until the ownership fight was concluded.

ACR's chief executive Andrew Cranswick said on Tuesday that they will be appealing this latest High Court decision, removing their legal ownership.

Observers have commented that the court's decision is an attempt to clear the dark cloud hanging over Chiadzwa stones, which have been shrouded in controversy. Sale of the diamonds had originally been banned by the international trade watchdog the Kimberley Process, over rampant human rights abuses at the mining site since 2006. But the Kimberley Process in July this year decided to certify Chiadzwa stones as 'conflict' free, allowing exports to resume.

An auction of a portion of the ZMDC's stockpile of diamonds went ahead last month, bringing in an estimated US$72 million. ACR's Cranswick at the time warned international buyers that buying Chiadzwa diamonds was complicit with theft, because of the ongoing ownership battle of the site. Some observers have since commented that the High Court's decision this week will help boost buyer confidence, by erasing doubt about who the diamonds belong to.