Petra Sells Williamson Stake for $15m
June 01, 23
(IDEX Online) - Petra Diamonds has sold half its stake in the Williamson mine, in Tanzania, for $15m.
The UK-based miner said the sale to Taifa Mining, the country's largest mining contractor, would place the mine on "a stronger basis for the future".
Williamson has been closed since the breach of a tailings dam last October, which released a five-mile river of gray sludge, damaging homes, farmland and infrastructure. It is not expected to re-open until August.
Under the new deal, announced yesterday, Petra and Taifa's Pink Diamonds will both hold an effective 31.5 per cent in Williamson Diamonds Limited (WDL), although Petra will retain a controlling interest. The government of Tanzania hold the remaining 37 per cent.
Petra is also planning the closure of its loss-making Koffiefontein mine, in South Africa, where it has so far laid off 382 workers, incurring costs of almost $5.5m. It also operates the Finsch, Cullinan mines, in South Africa.
It agreed a debt-for-equity restructuring deal with lenders in October 2020, after failing to attract buyers for a proposed sale and said earlier this year that it was open to merger and acquisition (M&A) proposals.
Richard Duffy, Petra's chief executive, said: "Our partnership with Taifa places Williamson on a stronger basis for the future. This new structure will reduce our equity interest in WDL, limiting our exposure in line with our stated objectives whilst retaining control and maintaining a share of the upside."
Rostam Azizi, chairman of Taifa, which has been contracting at Williamson for 20 years, said: "The mine has the largest kimberlite deposit in the world by surface area - with reserves and resources of 37.7mcts as at 30 June 2022.
"We recognise the mine's viability in providing sustainable employment and a significant contribution to the Tanzanian economy."
Pic shows Williamson mine, courtesy Petra