Tanzania halts Petra Diamonds’ decision to sell Williamson Diamond Mine
Shinyanga. Tanzania government on Sunday July 5 said it has halted a plan by the International Diamond “Petra Diamonds” to sell off the Williamson Diamond Mine (WDM) in Mwadui, Kishapu District, Shinyanga Region.
Minerals minister Doto Biteko issued a five-day ultimatum to the mine’s hierarchy to explain why they reached such a decision without consulting the government.
In tandem with putting to hold the selling plan, the government which owns 25 per cent of the company’s shares, has annulled the decision to send home employees due poor business performance in the wake of the Covid-19 pandemic.
“The government has 25 shares in this mine. If you want to sell it is a must for you to consult the government and get that approval,” said Mr Biteko.
One week ago, International diamond mining group Petra Diamonds announced that it had put up its Tanzanian mine for sale.
The company, which owns the Williamson Diamond Mine (WDL) located 23km northeast of Shinyanga said it would also sell its South African mines, according to news reports.
Founded in 1997, Petra Diamonds also owns the Finsch, Cullinan, and Koffiefontein in South Africa. But according to the deputy minister for minerals, Mr Stanslaus Nyongo, the government was not notified over the matter when the decision was reached.
The Williamson Diamond Mine (WDL) in which the government owns a 25 per cent stake was until recently under “care and maintenance”, according to the news reports on JCK, a diamond industry online newsletter.
In 2017, the diamond mine in Tanzania underwent a series of challenges that included a Parliament committee probe for alleged tax evasion. The government also seized some of its diamond consignments.
Following Petra Diamond’s decision, to sell the mines, bidders have been called to express interest in all or part of its assets. JCK reported that Rothschild & Co. was acting as strategic adviser of the transaction but so far, no offers have been received
. In March this year, the company launched a strategic review of its finances, particularly looking at the $650 million outstanding 7.25 per cent senior secured notes that are due for repayment on May 1, 2022, the newsletter reported.
In its most recent financial results for the third quarter ending March 31, revenue fell 32 per- cent, due in part to weak sales at its March tender, which was affected by the Covid-19 pandemic.
Meanwhile, according to earlier developments, the Williamson Mine had been going down- hill way back in 2017 after it was reported that a parliamentary committee was tasked to investigate discrepancies in diamonds mining in the central region of Shinyanga.
