THE government has allowed Petra Diamonds to resume diamond export and sales from the Williamson Mine in Shinyanga Region to avert closure of the mine, the Commissioner of Minerals, Benjamin Mchwampaka, has confirmed.
He told the ‘Daily News’ yesterday the
government had authorised the London-listed Petra Diamonds Ltd to resume
exports of newly mined diamonds while it continues to work on a parcel
of 71,654.45 carats which was blocked for exports on disputes of its
valuation.
“Yes, I can confirm they have been
authorised to resume exports to avert business closure but we are still
continuing working on the parcel that is held up,” said Mr Mchwampaka.
He said appropriate measures were now in place to ensure proper
valuation of gems for exports.
Petra Diamonds had halted production at
its Williamson mine for four days after the government seized a parcel
of diamonds suspected of being undervalued. The mining firm said the
diamonds were worth 14.7 million US dollars but a fresh evaluation by a
government team put the value at 29.5 million US dollars.
The diamond mining firm had pointed out
at the time that the government had complete oversight of diamonds
produced at the mine, which were physically controlled by a number of
different government representatives in conjunction with Petra from
point of recovery to point of sale.
It said the state valuation agency was
also responsible for the provision of valuation of parcels prior to
export. Two government ministers resigned after an investigation found
irregularities in contracts surrounding the mine in Shinyanga Region.
Williamson mine, which is 75 per cent
owned by Petra and 25 per cent owned by the government contributed 12.2
per cent of the company’s revenue in the past financial year, down 18
per cent year on year.
Petra had announced about the approval
to resume exports late on Wednesday, had lifted its shares at the London
Stock Exchange from two-year lows after they climbed more than 12 per
cent on Wednesday.
The shares closed 12.2 per cent higher
at 64.80 pence, after the stock had fallen on Tuesday to its lowest
since late 2015. In its statement, it said the exact timing and process
for the next diamond parcel export to its marketing office in Antwerp
and subsequent sale would be decided between the company and the
government.
The announcement eliminates at least one
of the headaches Petra has had in the past weeks, as it means it might
not breach its banking covenants after all. The troubles Petra has faced
in Tanzania mirror those encountered by Barrick Goldowned Acacia Mining
which has been the centre of a gold export probe launched by the
government earlier this year.
The investigation has taken such heavy
toll on Acacia — one of Africa’s largest gold producers — that the
company decided earlier this month to reduce operations in the country.
Mining contributes 3.5 per cent to the gross domestic product of
Tanzania, which is Africa’s fourth-largest gold producer.
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