Court allows firm to return to diamond fields after govt ban

March 1, 2016 7:35 AM

Zimbabwe's mines minister on Feb. 22 ordered all nine companies operating in the diamond fields in the east of the southern African country near Mozambique to stop mining and leave because their licences had expired.

Diamonds are seen during an exhibition in Gaborone, Botswana, November 23, 2015. REUTERS/Siphiwe Sibeko

A Zimbabwean court has allowed the largest diamond mine in the Marange fields to return and assume control of all assets after challenging government's decision to stop mining operations.

Zimbabwe's mines minister on Feb. 22 ordered all nine companies operating in the diamond fields in the east of the southern African country near Mozambique to stop mining and leave because their licences had expired.

Mbada Diamonds, a 50/50 venture between the government and Mauritius-registered Grandwell Holdings, on Monday won a reprieve from the High Court, which ruled that Mbada should have full control of its assets.

In the interim judgment seen by Reuters on Tuesday, the ministry of mines was ordered to let Mbada's security personnel have access to the company's mining site in Marange.

"As a contingency plan pending the hearing of this matter ... (minister of mines) shall allow such security personnel full access to all the relevant premises thereat, including residential premises, full access to all the equipment, diamond ore and any other assets," Judge Joseph Mafusire said.

A full hearing on whether Mbada can resume mining will be held on Wednesday.

Mines Minister Walter Chidhakwa told Reuters that the government, through the Attorney General, would launch an appeal on Tuesday, which would automatically suspend Monday's ruling.

"We believe in the original position that we took and we stand by that decision. The Attorney General will launch an appeal this morning," said Chidhakwa.

Mbada wants the court to remove the ministry of mines from its concession and force the government to renew its licence.

Analysts say the latest move by President Robert Mugabe's government could further tarnish the country's image as a risky investment destination, with investors already unnerved by Mugabe's drive to force foreign-owned firms to sell majority shares to locals.