Petra Diamonds Ltd has announced that operations at the Williamson mine in Tanzania have temporarily been stopped for “health and safety and security reasons”, even as it confirmed that a parcel of diamonds (71,654.45 carats) from the mine “has been blocked from export to Petra's marketing office in Antwerp and certain key personnel from Williamson are currently being questioned by the authorities”.

It stated that the stoppage was “a result of the aforementioned key personnel cooperating with the authorities on this matter”.

Earlier media reports had stated that a parcel of diamonds from Williamson was seized on 31 August at the Dar es Salaam International Airport while being exported to Belgium. It had been valued by the Company at US$ 14.7 million ((pre-market) while government estimates had reportedly put the actual value is US$ 29.5 million.

Petra said that the grounds upon which the government has taken action “have not been formally made known to the Company as yet”. The Company, in its statement said that Williamson mine is held 75% by Petra and 25% by the Government of Tanzania. It stated that all operations related to the mine are conducted in a transparent manner and in full compliance with legislation in Tanzania and the Kimberley Process, adding that the Government has complete oversight of the diamonds produced at the mine, which are physically controlled by a number of different Government representatives in conjunction with Petra from the point of recovery until the point of sale.

The Company further clarified that it is not responsible for the provisional valuation of diamond parcels from Williamson before they are exported to Antwerp; stating that this is “carried out by the Government's Diamonds and Gemstones valuation agency”. It said that this is a provisional valuation, and provisional royalty payments are made based on this.

Petra also pointed out that “adjustments to final royalty payments based on the actual sales proceeds for the diamonds, once sold in Antwerp, are then made at the end of the tender process”. It pointed out that the “competitive open tender process utilised by Petra is also used by several other diamond mining companies and has a proven track record of transparent price discovery”.

The Company announced that all documents related to the current parcel including the government’s Valuation Certificate, the KP certificate, shipment invoice, receipt of payment of provisional royalty, can be viewed on its website.

It concluded that Petra is committed to engagement with the Government in order to resolve this matter and ensure that the correct information is available to all parties. The Company will be in a position to address any other concerns raised by the findings of the parliamentary investigation once it has received a copy of the report.

Pic caption: Scrubber feed bin at the Williamson plant
Pic courtesy: Petra Diamonds