DAR ES SALAAM: Petra Diamonds has halted operations at one of its mines in Tanzania after the government seized a consignment and questioned some of its personnel as part of a crackdown on the mining sector.
Shares in the London-listed company sank 25 per cent in early trading, but by 0756 GMT had clawed back much of the losses to trade 6 per cent lower at 84 pence.
The diamonds were seized at the main airport in Tanzania’s commercial capital Dar es Salaam on August 31 as they were being exported by Williamson Diamonds Ltd to Antwerp, Belgium.
The Tanzanian government said on Saturday it planned to nationalize the diamonds, whose value it put at $29.5 million, after it accused the miner of under-declaring its mineral exports.
Tanzanian President John Magufuli ordered a review of a Petra contract and asked public officials to resign over the outcome of an investigation into the mining sector.
The president’s actions are a continuation of a crackdown in a mining sector that accounts for about 4 per cent of Tanzania’s gross domestic product.
Magufuli also said he had ordered law enforcement agencies to investigate allegations of under-declared diamond exports.
Tanzania has passed new laws to increase mining taxes, to force companies to renegotiate their contracts and to allow the state to own up to 50 per cent of shares in mining companies.
A committee said there were “gross irregularities” in the manner in which the Tanzanian government diluted its shareholding in Williamson from an initial 50 per cent to the current 25 per cent. — Reuters
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