Dar es Salaam. International diamond mining group Petra Diamonds has put up its Tanzanian mine for sale, it has emerged.
The company, which owns the Williamson Diamond Mine (WDL) located 23km northeast of Shinyanga says it would also sell its South African mines, according to news reports on Saturday June 27.
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 is yet to be officially notified over the matter.
“As we speak, I am not aware of that decision but we will follow it up,” he told The Citizen over the phone. 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 downhill 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.
The investigations, according to reports exposed weak mining contracts entered by government officials with mining companies.
Submitting its findings to the National Assembly, the then chairman of the committee, Mussa Hassan Zungu, said there were conflicting data on the actual amount of diamond transported outside the country among various government institutions.
The Committee made it known that the Ministry of Minerals reports had shown that Tanzania exported diamond valued at $362.1 million between 2007 and 2016.
However during the same period the Tanzania Minerals Audit Agency (TMAA) said the exports were $374.6 million. Further shortfalls that were also reported showed that the Ministry had also reported $18 million was paid as royalty but TMAA indicated that it was $15 million.
They disclosed that the estimated area has 4.04 million carat of diamond. However, it was not benefitting the country, according to Mr Zungu, who said that was where they had been hitting hard as WDL reported losses between 2007 and 2017 so as not to pay due taxes, including corporate tax.
Despite all, while the company continued to report losses, they did not abandon ship and continued with business as usual with a license that would expire in 2033, Zungu reported.