Tanzania: Market Conditions to Determine Williamson Operations

The Williamson mine in Tanzania remains under care and maintenance, and recommencement of operations is dependent on improved market conditions and rough diamond pricing.

Petra Diamond has said its Williamson mine in Tanzania continues to remain under care and maintenance until market conditions and rough diamond price improved.

The mine in Mwadui, Shinyanga, was placed under care and maintenance in the last six months after coronavirus was declared a pandemic and affected diamond price globally.

Petra said in a quarter-one statement that the diamond market has shown some modest improvement for the coming year, but there is still uncertainty around further disruption due to Covid-19 related restrictions.

"Sales post period end indicated like-for-like price movements up ca. 2.0per cent from the September tender.

"The company is continuing its flexible approach in planning its upcoming tenders in light of the Covid-19 challenges," Petra said.

The firm, which also has three diamond mines in South Africa, four months ago announced the sale of its stake in Williamson. However, its partner, the government of Tanzania, halted the sale because it was not notified.

Petra said risks to tender timing remain as a result of possible restrictions that may be re-imposed following a second wave of Covid-19 infections currently being experienced in a number of countries, including Belgium.

However, conditions in the diamond industry are improving as lockdown measures around the world are eased and retail outlets reopened.

Since the outbreak of Covid-19, a period of sustained low supply, particularly from the majors De Beers and ALROSA, has allowed for a better equilibrium in the market, and there was now improved demand from the downstream as retailers look to put orders in place in time for the festive retail season.

The cutting and polishing factories of India have ramped up to ca. 60per cent capacity under Covid-19 guidelines, but are looking at how to maximise working hours in order to meet demand, including observing a much shorter holiday period for Diwali than usual.

Many producers have reinstated their usual sales tender pattern in order to match demand.

However, all participants in the industry recognise that risks to a sustained recovery remain, particularly in light of the current resurgence of Covid-19 in key diamond markets, and much will depend on the level of consumer activity in the coming months, especially in the major US market.