Petra Diamonds was “in discussions” with the Tanzanian government regarding requirements that a 30% stake in the group’s Williamson diamond mine be offered to Tanzanian interests and the mine be listed on the Dar es Salaam stock exchange.
That’s according to CEO Johan Dippenaar who, in reply to an analyst’s question on a conference call held today covering the trading update on Petra’s third quarter production and sales, pointed out that the Tanzanian government already owned a 25% stake in the Williamson mine.
Dippenaar declined to provide further details and commented he did not want to “get ahead” of the outcome of the discussions with the Tanzanian government.
The new regulations have been introduced in Tanzania to promote local ownership and build the country’s capital markets with a deadline of August 23 this year set for mining companies operating in the country to comply.
Also affected by the new regulations is London-listed gold producer Acacia Mining. Acacia CEO Brad Gordon commented last week that the company would engage with the relevant authorities during the current quarter “with a view to finding a route forward that is both beneficial and practical for all stakeholders.”
Petra reported flat production for its third quarter to end-March mining 999,768 carats (third quarter to end March 2016 – 995,905 carats) as output from tailings and open pit volumes at the Williamson mine as well as the Kimberley operations in South Africa were hit by “unseasonably high rainfall.”
Dippenaar said Petra remained on track to hit its production forecast for the year to end-June of 4.4m carats. He commented the diamond market continued to show positive signs of recovery including evidence of rising retail demand in mainland China. He reported that rough diamond prices during the quarter were up about 2% on a like-for-like basis compared with the average for the first half of Petra’s current financial year to end-June.