Petra Diamonds Halts Mining Operations In Tanzania

Petra Diamonds announced to have halted operations temporarily at its Williamson mine in Tanzania opposing seizure of a consignment in Dar es Salaam which was getting prepared for export in Antwerp, Belgium.

Meanwhile, shares of Petra Diamonds in the London market has dropped 8 percent at 82.65 pence at 1318 GMT.

Tanzania is cracking heavily on the mining companies operating in the country alleging fair share of mineral wealth not being given to the government. The mining sector accounts 4 percent of the country’s GDP.

The government announced Saturday to be soon nationalizing the diamonds as the miners are regularly under-declaring the mineral exports.

President John Magufuli, nicknamed as The Bulldozer for his tough policies, ordered a review of the Petra Diamonds contract last week and public officials have been asked to resign.

Magufuli has even ordered the law enforcement agencies to investigation over the allegations of under-declared diamond exports.

New law too has been passed to rise the mining taxes as well as force the mining companies to renegotiate their contracts under which the state to own up to 50 percent of shares in the companies.

A parliamentary committee has noted gross irregularities last Thursday and following it the government reduced its shareholding to 25 percent in Williamson Diamonds. Earlier the government had 50 percent shareholding.

Petra has 1,400 employees in Tanzania and the mine contributed 18 percent of its revenues in 2016.