Miner sues for $500m

South Africa-based Amari Platinum, whose joint mining ventures in Zimbabwe were cancelled by the Ministry of Mines in controversial circumstances last year, is suing the government for a whopping $500-million for breach of contract at the International Court in Paris.

The broke inclusive government is said to be panicking over the massive lawsuit, but it has failed to come up with a concrete solution as the deal was done by the Zanu-PF regime.

Amari, which sunk $35-million into platinum exploration in the country, went into a joint venture with the Zimbabwe Mining Development Corporation (ZMDC) to form Zimari before the licence was cancelled.

Zimari was in the process of developing a $200-million Serui platinum project in Selous, about 70km from Harare, when the joint venture was stopped.

Earlier this year the High Court in Harare dismissed an application in which Amari Holdings challenged the cancellation, saying the matter was not urgent, but it will still be heard in the courts.

But the SA-based company feels that it could have lost $500-million due to the cancellation of the project, which was set to be fully operational by 2014. Amari was the largest foreign investor in the mining exploration sector between 2008 and 2009.

Mining experts and Ministry of Mines officials say the Serui Platinum Project, which was going to be a world-class venture, would have become one of the biggest platinum producers in the region.

While Amari officials were not available for comment this week, a Ministry of Mines official said they had already been informed that they faced a tough battle ahead. "We have been told that Amari has appointed a formidable legal team made up of top lawyers from leading South African law firms to press its damages claim.

"We believe this will be the first South African company to seek restitution under the Bilateral Investment Promotion and Protection Agreement (BIPPA) signed last year between Zimbabwe and SA to protect bilateral investment," said the official.

This is first time Zimbabwe has been sued in the International Court in France for a commercial damages claim.

Several companies whose mining deals have also been cancelled by government are watching the outcome of this case with keen interest.

Amari is said to have support and sympathy from the mining sector in Zimbabwe, which is helping the South African company with information and documents to support its claim.

There are also reports that Core Mining is also planning a lawsuit against government after its licence and joint venture with the ZMDC was cancelled.