Petra to investigate ‘human rights abuses’ at Williamson mine as allegations filed in UK court

Truck transporting ore at Petra's Williamson mine. Source: Petra Diamonds

THE problems mounted for Petra Diamonds which said today it was conducting an investigation into allegations lodged in a UK High Court filing of human abuses at the firm’s Williamson mine in Tanzania.

Petra is currently seeking a buyer for its assets or the entire company after it became clear it was struggling to contain debt which, as of March 31, stood at $601m (net). Then in May, the company missed an interest payment on a $650m bond. Negotiations followed as bondholders threatened to call in the debt.

After retaining Rothschild & Co, Petra had no other option but to sell assets, especially as diamond prices plummeted amid the Covid-19 pandemic.

Prior to these events, Petra announced it had mothballed Williamson citing an “… unprecedented depressed market environment”.

UK law firm Leigh Day filed the High Court action alleging on behalf of 32 individuals “… human rights violations, personal injuries and deaths … suffered at and surrounding the mine, arising from the mine’s security operations,” said Petra.

The claims have not been served on Petra or Williamson Diamond Mine (WDM) which is the local entity that manages the operation, the company said.

Similar accusations were also levelled by RAID, a non-governmental organisation (NGO). In a letter to Petra, the NGO cited allegations by local residents that the mine and its security contractor had committed certain violations. Petra said it was cooperating with RAID.

The accusations may have their source in illegal mining practices within the 30,600 square metre Williamson property that, owing to its size, Petra has previously struggled to contain, the company said.

“Petra takes these allegations extremely seriously,” it said in a statement. Petra said it hoped to conclude an investigation as quickly as Covid-19 related restrictions allowed. “Responses will be provided to the claimants’ lawyers in accordance with the relevant pre-action procedures of the English court, as well as to RAID,” it said.

Williamson mine has been operational for 75 years and has some 50 years of mine life available. In Petra’s 2019 financial year, the mine achieved the highest level of production for over forty years of 399,615 carats produced.

Shares in Petra closed 10% lower on Tuesday. At 186 pence/share, the company is worth a mere fraction of its former value when it was trading at 1110p, its year-to-date high.

2 COMMENTS

Comments are closed.