Africa-Press – Tanzania. A LOCAL mining company and its foreign investors are suing Petra Diamonds Limited (PDL) over alleged failure to complete the formal sale process of Williamson Diamond mines located in Mwadui, Shinyanga.
The International diamond mining group –Petra Diamonds announced the sale of its Tanzanian mines in June, 2020.
Following Petra Diamonds’ decision to sell the mines, bidders were called to express interest in all or part of its assets, with Rothschild & Co. acting as strategic adviser of the transaction.
According to the information obtained by the ‘Daily News’, the legal proceedings against PDL are to be filed in Tanzania, Belgium and the UK.
The suits would involve but not limited to halting of export and import of Williamson Diamond Limited (WDL) goods in the said countries, a demand letter sent to the CEO of Petra Diamonds Southern African (Pty) Ltd dated December 17, 2021 stated.
The company through its attorneys demanded that a tripartite meeting be convened between them, the government and PDL to discuss and finalise the sale process which the latter initiated through the bid process but was still pending.
The company’s letter to the Treasury Registrar copied to the Minerals Minister, Petra, South Africa and Williamson Diamond Limited dated December 20, 2021, hinted that the firm had instructed its lawyers to immediately hand seven days demand note to PDL to honour its obligation, failure of which lawyers would file multiple suits in the three countries.
The company participated in the international tender bid to buy PDL shares in the WDL in 2020, whereby in the first and second round they submitted 75 million US dollars and 77 million US dollars indicative and final offers respectively. In 2017, Petra diamonds in Tanzania underwent a series of challenges that included a Parliament committee probe for alleged tax evasion.
According to the findings, there was conflicting data on the actual amount of diamond transported outside the country among various government institutions. The government also seized some diamond consignments which were due to be flown to Belgium in 2017.
The impounded diamonds, owned by Petra Williamson Diamonds, were initially documented to be worth some 15 million US dollars but a government audit found them to be worth nearly twice that.
Three years later, Tanzania’s government officially nationalised diamond consignment.
This came after a court in the capital Dar es Salaam ordered two former government officials to pay fines or spend three years in jail for causing the government losses.
Police said the duo confessed their wrongdoing by colluding with Petra Diamonds in undervaluing the diamond shipment, and then the state decided to nationalise the diamonds.
In 2019, the then Vice- President of Tanzania Samia Suluhu Hassan, during her visit to the Mwadui mine ordered the Ministry of Minerals to set up a committee to investigate Petra Williamson Diamonds for not paying taxes since the mine was opened by claiming that the mining operation is unprofitable.
Regardless of the changes in the Williamson mine share structure that occurred late last year as a result of the signed framework agreement between the government of Tanzania and Petra, the Williamson mine would still be liable to pay to Petra Diamonds in excess of 150 million US dollars as financial liability accumulated over the years and still continue to remain under Petra’s management.
The Williamson Diamond mine is named after Dr John Williamson, a Canadian geologist who discovered it in 1940 as an economically exploitable primary diamond deposit.
Dr Williamson managed the mine until his death in 1958.
In 1958, De Beers and the colonial Government of Tanganyika bought the mine in equal partnership and the mine was operated by De Beers until 1973.
Thereafter, the Tanzanian State Mining Corporation (STAMICO) then operated the mine for 19 years. In 1993 it was privatised and De Beers once again became the operator of the mine with 75 per cent ownership.
In November 2008, De Beers decided to sell its interest in the mine to Petra Diamonds. The acquisition of Williamson by Petra Diamonds was completed in February 2009.
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