HEM GRANITE INDUSTRIES (PVT) LTD v KEELEY GRANITE (PVT) LTD 2008 (2) ZLR 123 (S) 2008 (2) ZLR p123

Flynote

Contract — termination — effect — rights accrued before the date of termination — enforceability of such rights

Mines and minerals — tribute agreement — effect — minerals extracted in terms of agreement but not removed from site by date of termination of agreement — tributor entitled to remove minerals subject to compliance with terms of agreement relating to payment of royalty

Headnote

The respondent entered into a tribute agreement with the appellant, which owned a mining location. Whilst the appellant was holder of the title to the minerals within its location it did not have the necessary capital for digging up, extracting, processing and disposing of the actual minerals for its own benefit and account. The agreement gave the respondent the rights, for a period of three years, to mine, extract, process, remove from site granite and dolorite blocks, and dispose of them for its own benefit and account, subject to payment of an amount of a royalty of 10% of the "at quarry" value of the minerals won. The value was defined as being the price set by the Minerals Marketing Corporation. The agreement had a termination clause, in terms of which the respondent had a right to terminate the tribute agreement if it was unable to continue mining operations due to causes beyond its control, subject to it giving the appellant three months' written notice of its intent.

The granite blocks extracted from the mining location were of poor quality and the respondent found it difficult to sell them at the price set for the lowest category of grades of the quality of granite blocks. This resulted in the operations of the respondent becoming increasingly uneconomic, and the respondent gave notice of termination. It duly removed its equipment from the site but left behind 188 granite blocks. Attempts were made to