Petra may mothball Tanzanian diamond mine amid crackdown
Difficulties at Petra’s Williamson diamond mine stemming from a crackdown by the Tanzanian government and the seizure of a parcel of diamonds could force the London-listed miner to breach two debt covenants and lead to a decision to put the mine into care and maintenance. Petra missed its full-year target of between 4.4-million and 4.6-million carats, generating 4-million carats because of labour difficulties at its new Cullinan processing plant near Pretoria, which delayed commissioning. The lower production hit profitability hard because about 70% of Petra’s costs are fixed, needing high production to offset them, while the firmer rand also played havoc with the bottom line. Net post-tax profit was $21m, down from $67m the year before. Mining profit fell to $169m from $176m. While the missed production target was important, more pressing for analysts was how Petra was managing the fallout from the government crackdown on its Williamson mine in Tanzania, which made up about 6% of o...
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