The Zimbabwe government last week lost its three year old battle to wrestle control of the Marange diamond fields from the British registered African Consolidated Resources (ACR) Plc in a landmark High Court ruling, The Zimbabwe Standard reported.



According to the newspaper, the ruling could have far reaching implications for the government which had profited from the sale of diamonds from the Chiadzwa area in Marange.



ACR approached the courts in 2006 after the Zanu PF government seized its claims, barely a year after the company had been granted diamond mining rights in the area, the report said.



The government then started mining the diamonds through the Zimbabwe Mining Development Corporation (ZMDC). But mayhem quickly ensued in the diamond fields as government officials, police and army officers joined illegal panners in plundering the diamonds, it said.



The scale of the looting and violence that occurred in Marange was unprecedented, the report said.



This alarmed human rights groups who started campaigning for Zimbabwe's ban from the international trade in diamonds. The campaign prompted the Kimberley Process to launch investigations into how diamonds were mined in Zimbabwe, said the report.

But the tables turned against the government on Thursday. In what was lauded as a landmark ruling, High Court Judge Justice Charles Hungwe ordered the ZMDC to stop its diamond mining activities and directed the government to restore ACR's rights to mine in the area, it said.



"It is hereby ordered that the ACR claims. . .within the area previously covered by EPO 1523 are valid and that they have been valid since originally pegged," Hungwe said delivering judgment in the case that began in October 2006.



"The rights granted to (ZMDC) by virtue of the special grant shall not apply in respect of the ACR Claims Area and (ZMDC must) cease its prospecting and diamond mining activities in the ACR Claims Area."



According to The Standard, Hungwe also ordered the Minerals Marketing Corporation of Zimbabwe (MMCZ) to return to ACR all diamonds seized from the company and all precious stones it bought from ZMDC that were mined on the ACR claims.



Alternatively, MMCZ can account for the proceeds of any such diamonds which it has sold, Hungwe said. About 40 foreign companies are estimated to have been buying diamonds at Marange daily before the military moved in. It is estimated that ACR was being prejudiced about US$6 billion in the past three years, the report said.

Thousands of people from both within and outside the country invaded the area in the diamond rush which ensued. Last year, government deployed soldiers to seal the area arguing that it wanted to stop the illegal mining activities, it said.



But review teams from the Kimberley Process Certification Scheme said they discovered that the army committed serious human rights violations and smuggled diamonds. Justice Hungwe also ordered the law enforcement agents to stop interfering with ACR's activities.



Mines and Mining Development Deputy Minister, Murisi Zwizwai yesterday said he had not seen the judgment. His boss Obert Mpofu was said to be attending a funeral.

Mpofu recently said government had identified investors to help it exploit the diamonds commercially.



ACR welcomed the ruling, saying it wanted to discuss a joint venture with government.



In a statement Friday, the company said: "Following the group's success in the Zimbabwe High Court, the group remains committed to dialogue with the Zimbabwe government, with a view to establishment of a joint venture which will operate for the benefit of both the company and the people of Zimbabwe.



"As soon as the joint venture achieves physical possession of the claims its immediate priority will be the establishment of full security as soon as is practicable. Thereafter the company hopes to make further announcements in respect of its intentions to establish a mutually beneficial operation as the situation develops."



ACR lawyer Jonathan Samkange said Hungwe's ruling showed that the country's judiciary was independent.



"This ruling also came at the right time," he said. "We are happy that it came a few days after the diamond mining indaba where President (Robert) Mugabe promised investors that property rights will be respected and also that they, together with their properties, will be protected by government. You will also remember that he said the rule of law will prevail and that the indigenization law will not affect diamond mines.



"This judgment will allow the inclusive government to demonstrate to the world its preparedness to abide by these promises. We hope the government allows my clients to fully implement the order.



"Majority shareholders in the company are Zimbabweans although of course they are of different races. What government does with the order will either make it walk with their shoulders high up or they can mess it up."