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Petra Halts Williamson Mine After Diamond Seizure

Sep 12, 2017 3:06 AM   By Rapaport News
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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
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Tags: petra, Petra Diamonds, Rapaport News, Rough Diamonds, tanzania, valuation, Williamson, Williamson Diamonds, Williamson Mine
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