Mbada Diamonds set to bounce back

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MBADA Diamonds’ principals, Mauritius-registered Grandwell Holdings, is set to resume mining operations in the Chiadzwa diamond fields after the Supreme Court ordered Marange Resources to pay renewal fees in fulfilment of a special grant agreement entered between the parties in 2009. Grandwell Holdings and Marange Resources locked horns after then Mines minister Walter Chidakwa cancelled the operations of all companies that were conducting business under the special grants in the Chiadzwa diamond fields in February 2016. The firm unsuccessfully approached the High Court, before it took its case to the Supreme Court.
The Supreme Court bench comprising deputy chief justice Elizabeth Gwaunza and judges Anne-Marie Gowora and Nicholas Mathonsi, ruled in Grandwell Holdings’ favour. The firm’s lawyer, Thembinkosi Magwaliba, confirmed the development. “An order was granted compelling the Zimbabwe Mining Development Company (ZMDC) 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,” Magwaliba said.
According to Grandwell Holdings’ chairman David Kassel, his firm entered into a joint venture and shareholders’ agreement with Marange Resources, a ZMDC investment vehicle, and Mbada Diamonds in 2009. In terms of clause 6.3 of the joint venture agreement, “Marange undertook 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 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”. The agreement further stated that Grandwell Holdings and Marange Resources would be equally represented on the board of directors. In terms of the contract, Marange Resources undertook to pay renewal fees in respect of the special mining grants. However, Kassel said, “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 the exemption application was turned down, but Marange did not pay the renewal fees. Magwaliba also argued in court that the company’s ejection from the mining fields was illegal. He prayed for the setting aside of the High Court order. However, Raphael Tsivama, who represented ZMDC, had argued that Grandwell Holdings ought to have brought its case before an arbitrator instead of bringing the proceedings before the courts. He said the application was misplaced and should have been dismissed

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