Judgment Day for Mbada Diamonds

Chief Court Reporter
The High Court is today expected to deliver judgment in the case in which Mauritius-registered Grandwell Holdings, with a 50 percent controlling stake in Mbada Diamonds (Private) Limited, is involved in mining dispute with the Government of Zimbabwe.

Mbada returned to the diamond mining site in Chiadzwa to secure its equipment pending determination of the dispute after it obtained a temporary reprieve from the same court.

Parties to the dispute have since been notified of the judgment today.

Grandwell Holdings and Marange Resources entered into a joint venture mining partnership in which the two held 50 percent each some seven years ago.

A diamond joint venture company, Mbada Diamonds was formed, which carried out diamond mining activities in the Chiadzwa area in terms of the set conditions.

Government ordered all diamond mining companies off the Chiadzwa fields after they defied a policy directive for all to merge into a single company called the Zimbabwe Consolidated Diamond Company (ZCDC).

Mbada, among other diamond firms, was given 90 days to remove its equipment and other assets from the site. However, Grandwell is seeking the eviction of the Ministry of Mines and Mining Development and representatives of the Zimbabwe Mining Development Corporation, 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. Grandwell Holdings holds 50 percent of the issued share capital of Mbada while the remaining 50 percent is held by Marange Resources, which is wholly owned by ZMDC.

Government accused Mbada of failing to renew the special grant, hence the expiration of such grants now requires the company to shut down its operations and vacate the premises.

However, Grandwell in its application, argued that Marange Resources, a Government company, undertook to do the renewal of the grants among other warranties on behalf of the joint venture company.

Grandwell argued that 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.

Grandwell said Mbada, over the existence period of the joint venture agreement, paid $472 million into the fiscus, a figure which will drop to zero if the company’s operations are permanently shutdown.

The company stated that diamonds were being stolen from the mining sites in the absence of Mbada’s security personnel and there was need for an order compelling Government to allow the diamond company’s security team back to the site.

It was also claimed that Mbada’s equipment was being misappropriated and damages were being sustained on an on-going basis.

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  • juniour

    From a bird’s eye view, it looks better to grand back the former companies the right to mine the diamond just for the benefit of the nation. there is a group of ZCDC executives that are bend making the consolidation not only bad but evil through unwarranted and unnecessary fighting. I fully supported the drive to make the transparent diamond transactions but it is now being regarded the worst decisions by gvt. the idea of consolidation was very noble and thoughtful. the problem is on the implementation of the plan as those at the helm waste time settling personal vendettas at the expense of production time . As we speak the company led by the a boiler maker calling himself Engineer Murwisi successfully back bitted,pulled down and overthrew a more competent and experienced miner to corruptly lend the position of acting CEO. The government must seriously consider hiring a competent CEO if they feel they have lost faith in the outgoing acting CEO. things had started to take shape and production of late was improving . we need not watch our dear govt bleed when the nation is blessed with such natural resources. an open and honest advice to the honourable minister is to fire this Gudyanga led board which is operating from more like a replica of marange resources regime . All the board members have something to do with M.R some as employees and some as board members . the reason why the outgoing CEO has become unpopular is that he refused to be dragged into Gudyanga corruption and found Andrew to be the most suitable as he has in the past been corrupt himself…it is common knowledge that Gudyanga is the most corrupt and worst civil servant in independent Zimbabwe (herald 2016) . At least the company could have contributed meaningfully to the fiscus had it maintained an executive that is allowed to execute brilliant plans on cards. needless to say the incoming CEO was also from mbada which had the worst in terms of diamonds security . the worst recorded high profile and well coordinated theft cases that included manipulation of technology and engineering which he was leading. thumps up to nyashanu for refusing to be part of this nonsense and maintaining his integrity . Honourable minister the people expect better from ZCDC but the first port of call is to refuse to be foooled and lied to by this corrupt and not so competent board. To Murwisi, it is known that there are people who are threats to the position that you were awarded by someone who didn’t know that you where planning his downfall. there are holders of the relevant mining qualification from the most credible institution and giving people suspensions and last warnings is only guaranteeing your automatic appointment as you would have whipped away all the potential challengers. The ministry without Gudyanga should intervene before this promising project is plunged into deeper mess.