29 February 2016

Zimbabwe: Mbada Diamonds Fights Government's Seizure of Diamond Mines

Photo: The Herald

MBADA Diamonds has won a High Court reprieve as it fights the government's decision to seize the controversial Marange diamond industry.

Mines minister Walter Chidhakwa last week ordered Marange diamond firms to stop operations and gave them 90 days to withdraw their equipment from the mines.

The minister said the companies had resisted government plans to consolidate operations into one state-dominated mining company, adding they had also failed to renew their licences which had expired.

Mbada has challenged the decision at the courts. The company is chaired by President Robert Mugabe's former helicopter pilot and South Africa-based multi-millionaire Robert Mhlanga.

Mugabe's spokesman has previously denied reports claiming Mhlanga was a business associate of the veteran Zimbabwean leader.

"What is the link between Robert Mhlanga and Robert Mugabe except that they share the same [first] name?

Presidential spokesman George Charamba once told a South African publication: "I find it strange that any Zimbabwean who makes money must be in association with Robert Mugabe.

"Is it being implied that Zimbabweans are not entrepreneurial enough?"

Mbada Diamonds is a 50-50 joint venture between Mhlanga-linked Grandwell Holdings and Marange Resources, the latter owned by the government through Zimbabwe Mining Development Corporation (ZMDC).

High Court Justice Joseph Mafusire on Monday issued an order compelling the State to allow Mbada access to its diamonds and equipment at Chiadzwa pending determination of the dispute Grandwell Holdings and the government.

Mines minister Chidhakwa said the government would appeal the court ruling.

"We have instructed the Attorney-General's office to look into the matter and file an appeal. Maybe tomorrow (Tuesday), we will be filing the appeal," Chidhakwa ZiFM radio station.

Grandwell is seeking the eviction of the Mines Ministry and representatives of ZMDC, Marange Resources and the Zimbabwe Consolidated Diamond Company from the mining site.

The company is also seeking restoration of its full control, peaceful and undisturbed possession of the mining site.

Mbada was one of the leading operators at Marange along with Anjin, which was claimed to be a joint venture between companies linked to the Chinese and Zimbabwean military.

In his founding affidavit, Glandwell chairman David Kassel argues that the government's decision to evict the diamond miners was "unlawful".

"As appears from what is set out below, the Government respondents have embarked upon an unlawful scheme which is designed to facilitate the nationalisation and/or expropriation of Mbada's assets," he said.

Glandwell also denies allegations it failed to renew its mining permit, arguing that under the joint partnership deal with the government-owned Marange Resources, the latter undertook to facilitate the renewal of the grants on behalf of the joint venture company.

Kessel maintains that the government, through Marange Resources, undertook to protect the rights of the foreign investor and to "observe the utmost good faith and not do, or omit to do anything which might prejudice or detract from the rights or interests" of the foreign investor.

The company argued that Government had "wilfully and with malice, breached its obligations and undertakings".

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