RAPAPORT… Petra Diamonds has agreed to reduce its stake in the Williamson mine in Tanzania as part of a new deal with the government of the East African country.
The “framework agreement” will leave the UK-based company with a 63% ownership in Williamson Diamonds, the Tanzanian holding company for the site, down from 75%. The government’s share will increase to 37% from 25%, Petra said in a statement Monday.
Petra will also grant the government a 16% “free carried interest” — ownership without any financial obligations. The state is entitled to receive this under a 2017 law granting it greater control over mineral resources.
Petra has had a challenging time in Tanzania. In 2017, authorities there seized a parcel containing 71,654 carats of rough from Williamson. The company put the site on care and maintenance in April 2020 during the market downturn, and has also faced allegations of human-rights abuses by security workers at the mine.
Mining operations recommenced during the fiscal first quarter ending September 30. The agreement calls for both Petra and the government to fund the restart.
Image: A truck at the Williamson mine. (Petra Diamonds)
Petra to Trim Ownership in Williamson Mine
The Bottom Line
- Petra Diamonds will reduce its ownership in Williamson Diamonds from 75% to 63%, while the Tanzanian government’s share rises from 25% to 37%.
- The government receives a 16% free carried interest in the mine, as mandated by a 2017 law enhancing state control over mineral resources.
- Mining operations at Williamson resumed in the fiscal first quarter ending September 30, with both Petra and the government funding the restart.
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