Who owns diamond in TZ?

Some small scale miners in Geita process the sand containing gold by using outdated technology. In both gold and diamond industry, big chunk of the lucrative sector is controlled by the foreign investors.. PHOTO | FILE

What you need to know:

  • The programme, which involved a substantial rebuild of the existing plant and major pit reshaping work, revealed a major resource of 39.4-million carats on the Mwadui kimberlite upon which the mine is based.

Dar es Salaam. In the wake of heated debate on who really owns the biggest chunk of Tanzania’s abundant mineral resources, The Citizen today reveals the biggest players in the diamond industry.

According to details gathered by this newspaper, Tanzanians, through state ownership, own only 25 per cent of the Williamson Diamond Mine, while Petra Diamonds, headquartered in Jersey, owns the remaining 75 per cent.

Listed in the London Stock Exchange, Petra Diamonds is an independent diamond mining group and an increasingly important supplier of rough diamonds to the international market with the strongest diamond market centres in Johannesburg, South Africa, and Antwerp in Belgium, where Tanzanian diamonds are marketed, according to a report released by the company last month.

Speaking to The Citizen yesterday, the Director General of State Mining Corporation (Stamico), Mr Gray Mwakalukwa, said the mine, was run by De Beers in collaboration with Stamico for three decades, is now controlled by Petra Diamonds, which has majority shares, while the state has a small stake, which does not involve the parastatal.

“In the past Stamico used to own shares in the Mwadui diamond mine on behalf of the government, but the shares have yet to be returned,” he said.

Igunga MP Dalaly Kafumu, who is a geologist, told The Citizen that in 1994 the government decided to sell its shares to De Beers because of failure to pay contributions to the share capital on the grounds that it (the government) had too many commitments.

“At independence, the government had 50 per cent of shares in Mwadui mine. The government decided to sell 25 per cent of shares and remain with 25 per cent because it was overwhelmed by too many commitments. When Petra Diamonds took over, the government had remained with 25 per cent,” said Dr Kafumu.

According to him, the government, like Petra Diamonds, had been paying royalties and had the opportunity to receive dividends in line with allotted shares when the mine reaps profits.

Williamson mine announced early this year that diamond production increased by 471 per cent in nine months from July 2012 to March, this year.

The production has gone up from 21,570 carats in nine months that ended in March 2012 to 123,243 recorded in nine months that ended in March this year. The firm statement said the mine’s run-of-time (ROM) production continued as planned, where basing on tonnages treated it has improved significantly to remain in line with projections. Apart from Mwadui in Shinyanga Region, Petra Diamonds has interests in seven diamond producing mines in South Africa, namely Finsch, Cullinan, Koffiefontein, Kimberley Underground, Helam, Sedibeng and Star mines.

In its online edition, Petra Diamonds reports that it is looking to extend the life of its Williamson diamond mine from 20 years to more than 50 years following the completion of the first phase of its development programme.

The programme, which involved a substantial rebuild of the existing plant and major pit reshaping work, revealed a major resource of 39.4-million carats on the Mwadui kimberlite upon which the mine is based.

“Williamson is the world’s largest economic kimberlite by surface area at 146 ha in size. It is Tanzania’s only important diamond producer and despite having been operated continuously since 1940, the pit is only 90 m at its deepest point owing to the large size of the deposit,” the company states in its October report.

Petra is now implementing an expansion plan to increase production from about 160 000 ct/y in the 2013 financial year to about 300 000 ct/y by the 2017 financial year.

The debate on who actually owns the minerals resources was sparked off during the forum held at the University of Dar es Salaam 10 days ago when Energy and Minerals minister Sospeter Muhongo claimed that business tycoon Reginald Mengi held numerous prospecting rights without developing them.

Mr Mengi has been maintaining that Tanzanians have been left out of owning mineral resources, especially during this era of the hydrocarbons bonanza.

According to Mr Mengi, Prof Muhongo has not spoken the truth by stating that Tanzanians own the bulk of mineral resources in the country.