Government Takes Greater Control of Williamson Mine, Tanzania
December 15, 21
(IDEX Online) - The government of Tanzania is taking a larger share of the Williamson mine from Petra Diamonds, its joint venture partner.
The split will now be 63 per cent to Petra and 37 per cent to the government, from 75 per cent to Petra and 25 per cent to the government.
The move is being made following a change in rules which allows the government to take control of an additional shareholding without payment.
In March, London-based Petra concluded a debt-for-equity restructuring to secure the future of Williamson (pictured), after failing to attract a buyer for its three mines in South Africa.
Revenues had plunged and it was struggling to repay $650m of debts. The deal reduced shareholders' stake in the company to just nine per cent.
The open-pit mine was mothballed in April 2020 to "preserve its liquidity, at a time when diamond pricing was impacted by the COVID-19 pandemic". Operations resumed in Q1 FY 2022.
As party of a framework agreement published yesterday, proceeds from a long-disputed parcel of diamonds, confiscated four years ago and then valued at $15m, will go towards the resumption of operations at Williamson.
In addition, the joint venture, Williamson Diamonds, must pay the government $20m in annual instalments.
Petra said the agreement marked "an important settlement between the parties of long-standing, historic disputes".