(Bloomberg) -- African Consolidated Resources Plc said Zimbabwe’s High Court has rescinded a judgment that affirmed the company’s rights to the Marange diamond field that was seized by the government. The shares fell the most since May.
In September, High Court judge Charles Hungwe ruled that mining claims at Marange belonged to African Consolidated, known as ACR, and mining operations being carried out by the state- owned Zimbabwe Mining and Development Corp. in joint-ventures with closely-held South African companies Mbada Investments (Private) Ltd. and Canadile Miners (Private) Ltd. should be suspended.
“We will be appealing the judge’s decision to the Supreme Court, which has the effect of suspending the ruling so that existing orders still stand,” Andrew Cranswick, chief executive officer of Maidstone, U.K.-based ACR said in an interview from the town today. “ACR as a company remains ready and willing to reach a compromise settlement with government on the issue.”
ACR had its Marange mining license, known as a claim in Zimbabwe, confiscated by the government in 2006. At the time, the government didn’t give a reason for its decision. Mbada and Canadile sold 900,000 carats of diamonds at an Aug. 12 auction, raising an estimated $72 million, Finance Minister Tendai Biti said on Sept. 2.
The southern African nation’s state-controlled Herald newspaper today said Hungwe had reversed his ruling on Marange because its original license had been wrongfully issued.
African Consolidated shares fell as much as 20 percent in London and traded 16 percent down at 9.25 pence as of 10:38 p.m. local time, putting them on course for their biggest decline since May 11.
--Editors: Antony Sguazzin, Alastair Reed
To contact the reporter on this story: Brian Latham in Durban at blatham@bloomberg.net.
To contact the editor responsible for this story: Antony Sguazzin in Johannesburg at asguazzin@bloomberg.net.
