Supreme Court clears path for Mbada Diamonds to resume mining in Marange

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Marange Resources obligated to renew licence as part of agreement allowing Mbada to mine in ‘perpetuity’

Breakthrough … Mbada Diamonds equipment has been lying idle since the government ordered miner out of Marange

HARARE – The Supreme Court has directed Marange Resources to pay renewal fees that would enable Mbada Diamonds’ principals, Mauritius-registered Grandwell Holdings, to resume mining operations in the Chiadzwa diamond fields in line with a special grant agreement entered between the parties in 2009.

The litigation between Grandwell Holdings and the government-owned firm arose after the then Mines minister Walter Chidakwa called for a meeting in February 2016, where he cancelled operations of all companies that were conducting operations under the Special Grants in the Chiadzwa diamond fields.

Grandwell Holdings went on to file an appeal after the High Court dismissed its initial application in which it sought the government-controlled firm to renew the operating licences in line with the Special Grants agreement entered by the parties.

However, deputy chief justice Elizabeth Gwaunza and two other judges: Anne-Marie Gowora and Nicholas Mathonsi, ruled in favour of Grandwell Holdings in a judgment that will see the firm back in business.

The firm’s lawyer Thembinkosi Magwaliba confirmed the ruling yesterday.

“An order was granted compelling the Zimbabwe Consolidated Diamond Company (ZCDC) and Marange Resources to apply for the renewal of the Special Grants which expired between 2010 and 2013 and ensure that they pay the renewal fees which are supposed to be paid,” Magwaliba said.

Grandwell Holdings’ chairman David Kassel had revealed in court papers that his firm entered into a joint venture and shareholders’ agreement with Marange Resources, a Zimbabwe Mining Development Company (ZMDC) investment vehicle and Mbada Diamonds in 2009.

According to clause 6.3 of the joint venture agreement, “Marange undertakes that it shall forthwith after the signature date and thereafter for the duration of this agreement, pay all necessary fees and make application for the renewal and/or continued existence and do all that may be necessary so as to ensure that the Special Grants and rights thereunder are in good standing and remain valid for the duration of this agreement allowing Marange to mine and prospect the concession areas in perpetuity.”

It was a further term of the agreement that Grandwell Holdings and Marange Resources would be equally represented on the board of directors.

The contract also stated that Marange Resources would undertake to pay renewal fees in respect of the special mining grants.

“In breach of its contractual obligations, the second respondent (Marange Resources) did not pay renewal fees in respect of the special mining grants. It sought instead an exemption from payment of the renewal fees without knowledge or approval of the applicant (Grandwell Holdings) and the third respondent (Mbada Diamonds),” Kassel said.

He said the exemption application was turned down, but Marange did not pay the renewal fees, as had been agreed, forcing the firm to approach the courts for recourse. Zimlive

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