As tensions between foreign-owned mining companies and the government mount, Petra Diamonds threatens to cut investment in Tanzania if it is prevented from shipping stones to its overseas marketing office.
“We won’t be stupid and just keep on pumping in money if it’s clear it will come to naught,” chief executive Johan Dippenaar said on Monday after Petra reported its annual results. “We’re monitoring the situation carefully.”
The London-listed company halted operations at its Williamson mine last week after the government seized a parcel of diamonds for export on suspicion they were undervalued.
Although Petra has restarted production at Williamson following a four-day shutdown, it could breach its banking covenants if it cannot resume exports by the end of the year. The company has net debt of $555m.
Petra, which also operates three mines in South Africa, is the latest mining company to fall foul of authorities in Tanzania as President John Magufuli seeks more control over the country’s natural resources.
Petra said the parcel of 71,654 carats of diamonds that was seized had still not been released by the Tanzanian authorities, and it had not received an official explanation.
The government said the diamonds are worth more than declared and has charged two officials involved in the valuation process with “economic sabotage”.
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