George Smith responds to ACR case

Former High Court judge George Smith who has written several letters to The Insider as the legal adviser for River Ranch says there is no conflict of interest in his giving advice to both River Ranch and African Consolidated Resources.

“The two are not rival companies,” he said. “There is no common interest between the two companies. I have read the article in The Insider about the ACR Claims and, from the false statements and inaccuracies made therein, have no doubt that you are the author.”

Smith was responding to a query on whether there was no conflict of interest in his giving advice to two different companies both involved in mining diamonds.

River Ranch owns a diamond mine of the same name near Beitbridge while ACR owns the mining claims at Marange which have been taken over by Mbada working together with the government-owned Zimbabwe Mining Development Corporation.

High Court judge Charles Hungwe ruled last September that the claims legally belonged to ACR. The Insider has been questioning how ACR got those claims.

Smith said there was no three month-window period after De Beers EPO (Exclusive Prospecting Order) expired on 28 March 2006.

“As Judge Hungwe said in his judgment, once the EPO expired it ceased to exist and so could not be extended. There was nothing to extend. Even if it had not expired, the Mining Affairs Board has no power to extend the life of an EPO. It can only make a recommendation to the Minister that it be extended and the Minister would then extend the EPO,” Smith said.

In his judgment, however, Hungwe says ACR’s claim was cancelled because EPO 1523 was supposedly still valid. He quotes the Minister of Mines as saying that Kimberlitic Searches, also known as De Beers Zimbabwe, had applied for an extension to their EPO 1520 and 1523. “These had already been processed notwithstanding that the Mining Affairs Board sat after the expiry of both EPOs,” Hungwe says.

Hungwe, however, granted the claim to ACR because under the Mines and Minerals Act it is not permissible to extend an EPO which has expired.

Smith went on to argue that it was wrong for The Insider to say that from June the Marange diamonds “were legally owned by the two companies”.

“They were owned by ACR. De Beers was not in the picture. ACR started fencing the area of their claims as soon as they could after they found diamonds. However, Amos Midzi called in the police and falsely told them that ACR were illegal occupants and should be evicted.

“The police then moved in and stopped ACR from fencing their claims. Had Midzi and the police not unlawfully intervened, ACR would have fenced their claims and the illegal miners would not have been able to collect diamonds.

“Your reference to “sources” saying that ACR invited locals to help it collect the diamonds is very suspect. You obviously realized that it would have been ridiculous for ACR to ask the locals to help it collect the diamonds and so you claim that “sources” told you that. The last thing that any responsible company would do would be to get people it had no control over to go and collect diamonds and then expect them to hand over all the diamonds they collect,” Smith said.

From Hungwe’s judgment, however, it appears that De Beers EPO was extended, though this turned out to be against the law.

Hungwe’s judgment in full

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