Petra to Sell 50% of Stake in Williamson Mine

RAPAPORT… Petra Diamonds has agreed to sell just under half of its shares in the Williamson mine to a local business in Tanzania.



Caspian, Petra’s long-term technical-services contractor for the site, will acquire 50% of the UK-based miner’s stake in holding company Williamson Diamonds Limited (WDL) — minus one share — for $15 million, Petra said Wednesday. Petra will retain a controlling interest.



The memorandum of understanding (MoU) — which is not final — will leave both Petra and buyer Caspian with a 31.5% stake in the mine. This follows a recent agreement between Petra and the Tanzanian government under which Petra would reduce its interest in Williamson to 63% from 75%.



Caspian will fund the acquisition through $11.1 million in past payments that WDL owes to the contractor, as well as $3.9 million in services it will render to WDL to ramp up operations at the mine.



Petra has previously declared its intentions to sell Williamson following a slew of difficulties at the mine, which is located in the northern part of the East African country.



In 2017, the government confiscated a parcel containing 71,654 carats of rough from the site. Petra put the mine on care and maintenance in April 2020 during the market downturn and has also faced allegations of human-rights abuses by security workers.



Earlier this week, it announced a “framework agreement” with the government that increased the state’s holding in Williamson to 37% from 25%.



The new arrangement with Caspian “puts Williamson on a very solid basis for the future,” said Petra CEO Richard Duffy. Lowering the equity interest at the same time as keeping control “reduces Petra’s exposure in line with our stated objectives…while maintaining a share of the upside that we believe exists,” he added.

Image: Production work taking place at the Williamson mine. (Petra Diamonds)