A tumultuous High Court ruling resulting from a long-running lithium mining dispute between Chinese investors and a government-owned firm in Zimbabwe may lead to the cancellation of mining licenses granted after 2003.

The case has also brought attention to the dangers of making investments in the profitable mining sector, especially in light of the nation’s current lithium rush.

Lithium exports brought R3.9 billion to Zimbabwe in just the first nine months of last year. After gold and platinum group metals, the mineral is expected to rank as the third-largest mineral export from the nation.

In the last two years, Chinese companies have invested up to R19 billion in the acquisition and development of lithium mines in Zimbabwe.

Zhejiang Huayou Cobalt, Sinomine Resource Group, Chengxin Lithium, Yahua Group, and Canmax Technologies are a few of the major participants.

However, the state-owned Sandawana Mines and the little-known Avoseh Investments are at odds.

The government owns Sandawana through the Kuvimba Mining House.

Avoseh and Sandawana are at odds over a lithium mining claim that the latter says falls under its purview.

The conflict started when Rio Tinto, a multinational mining company based in Australia and Britain that is currently the second-largest metals and mining corporation in the world, registered an area as Sandawana’s property in 1964.

A 3 800 hectare region was marked by Sandawana, following which private players were invited.

When Avoseh finally showed up, it pinned its 24 blocks and registered in November 2022. The Chinese company continued to mine and is currently in possession of lithium ore valued at R285 million, according court documents.

However, Sandawana argues that the ore was mined unlawfully in the area, therefore it obtained a court interdict to prevent the ore from being shipped to a processing plant.

Sandawana sought and received a ruling that Avoseh was improperly given rights to carry out mining activities.

Avoseh’s mining claim was declared void by Justice Lucy Mungwari of the High Court in Harare, as the company obtained a mining permission prior to obtaining an environmental impact assessment certificate (EIAC).

According to Justice Mungwari, since 2003, applicants for mining permits have been required by Section 97 of the EMA Act to obtain an EIAC prior to obtaining a mining license.

It is therefore “undisputed that Avoseh’s claim was registered in the event that the EIAC was not present. In the lack of the aforementioned certificate, it was granted mining title. Any kindred mining operation, including mineral prospecting, mineral mining, ore processing, and concentrate, must first complete an EIAC issued by EMA, the spokesperson stated.

Mungwari stated in her decision that it is incorrect for anyone to believe that the EIAC is not a prerequisite that must be met in order for a prospecting license or even a mining license to be granted.

According to the judge, Sandawana has not been impacted by the additional regulations since taking over from Rio Tinto.

However, Avoseh has been mining unlawfully, as have all other mining companies in Zimbabwe that obtained their licenses in a similar manner since 2003.

Avoseh is appealing against this ruling.

However, if the ruling stands, it implies that all mines registered in Zimbabwe after 2003 were illegally operating.

Avoseh’s lawyer, Professor Lovemore Madhuku, claimed that the court needed to distinguish between the implementation and execution of mining operations on the one hand and the legality of a title on the other.

“A mining title is valid without reference to the EIAC. It is the carrying out of the operations that ought to be held in abeyance until the EIAC is acquired,” he said.

Madhuku argued that one can get a licence, but cannot go ahead and mine without the EIAC.

He also argued that there was no way anyone could get an EIAC of an area that they don’t have rights to. Therefore, it was impossible for Avoseh or any other firm, to have an EIAC before having rights to a piece of land.

Sandawana took this route after it failed to prove in court that Avoseh encroached into its area.