Petra Halts Williamson Mine After Diamond Seizure

RAPAPORT… Petra Diamonds has paused operations at its
Williamson mine in Tanzania after reports that authorities seized a parcel of
rough stones in a disagreement over valuation.

A parcel containing 71,654 carats of diamonds from Williamson was blocked from
export to Petra’s marketing office in Antwerp at the end of last month, the
miner said Monday.

Williamson Diamonds — of which Petra owns 75% and the government 25% — had said
in its documentation that the diamonds in the parcel were worth $14.8 million,
according to papers Petra released. These documents included a
diamond-valuation certificate from the Ministry of Energy and Minerals — dated
August 28 and stamped on the ministry’s own notepaper — as well as a Kimberley
Process certificate.

However, a later valuation by the government
found the “actual” value to be $29.5 million, Reuters reported last week,
citing a statement by Tanzania’s Ministry of Finance and Planning.

Authorities seized the goods on August 31 at the main airport in Dar es Salaam,
Tanzania, as Williamson Diamonds was exporting them to Antwerp, Reuters
reported. Tanzania intends to declare the seized diamonds state property, the
news agency continued, again citing the government statement.

In its Monday comments, Petra said authorities
were questioning “certain key personnel” from the mine.

“As a result of the aforementioned key personnel cooperating with the
authorities on this matter, operations at Williamson have temporarily been
stopped for health-and-safety and security reasons,” Petra said.

The miner stressed that it had not been responsible for the $14.8 million
valuation. The government’s diamond- and gemstone-valuation agency is the body
that determines the value of diamond parcels from Williamson before their shipment
abroad, Petra said. In any case, it continued, this valuation is provisional;
while it helps calculate the company’s provisional royalty payments to the
government, those amounts can change depending on the results of the stones’ tender
in Antwerp, the miner explained.

All operations related to the Williamson mine are transparent and in full
compliance with legislation in Tanzania and the Kimberley Process, Petra stated.

Tanzanian President John Magufuli is in the process of overhauling the nation’s
mining industry, according to a Monday report by Bloomberg.

Meanwhile, Petra’s stock fell more than 20% in early trading Monday following
the company’s announcement, before recovering to end the day at a 6% decline.

The Finance and Planning Ministry and the Ministry of Energy and Minerals could
not immediately be reached for comment.

Image: Williamson mine, Petra Diamonds