PETRA Diamonds said its Williamson mine in Tanzania would not return to production before the middle of 2023 following the partial collapse of a tailings dam earlier this month. The company has previously said the mine would be suspended for three months.
Williamson produced 228,000 carats of diamonds in Petra’s 2022 financial year ended September 30, equal to about 7% of total production for the year. The mine was reopened during the last financial year following an improvement in diamond prices.
In the meantime, the company was investigating whether it could sell a previously impounded parcel of diamonds in order to finance the mine whilst operations were suspended.
The parcel of diamonds, which Petra had valued at $14.8m, was seized by the Tanzanian government in 2017. The government claimed the true value of the parcel was $27m. It alleged Petra had “cheated” the government by declaring a lower valuation.
The Tanzanian government subsequently agreed to allocate the parcel to Petra following the Framework Agreement with Williamson.
In an announcement today, Petra said it was weighing up options regarding the construction of a new tailings storage facility (TSF), details of which would become available in February. “It is now expected that this new TSF will take longer than initially anticipated to become operable,” the company said. As a result, it was weighing the repair of the existing TSF.
Commenting on the incident, Petra said an investigation had found that some 12.8 million cubic litres of water and tailings material were released following the breach of the TSF wall, the cause of which was put down to “subsidence”.
Petra was still working on how the subsidence occurred. “Cost and timing of the investigation will be available after a detailed scoping process is completed, but initial indications are that this exercise will take six to 12 months,” it said.
A total area of 3.57km2 was covered with deposition from the TSF but that no dangerous chemicals were found to have been released. “Environmental work to date confirms the tailings material which flowed out of the TSF is inert,” the company said. There were no fatalities or serious injuries as a result of the breach.
Containment walls and a new wall had been constructed at the site of the new Alamasi dam. Petra would also construct temporary housing facilities for community members affected by the breach.
This comes at an unfortunate time for Williamson which was reopened last year following a decline in diamond prices forced it into mothballs. During this time, Williamson was subject to numerous incidences of illegal mining which local security sought violent means to quell.
A new social compact signed with Petra, coinciding with an improvement in diamond prices and a prior restructuring of Petra’s balance sheet, enabled the company to reopen Williamson after considering its sale for a period.