Petra Diamonds temporarily has stopped its operations at the Williamson mine in Tanzania following seizure of a consignment of diamonds and question of its employees related to the wider investigation of the country’s mining industry.
The effect of halting operations was seen largely on the company’s shares in London with a drop of 8 percent at 1318 GMT.
However, this is not the highest drop in past 21 months. Earlier in the session a slash down of 28 percent was seen.
Tanzania argues Petra has not been giving the government a fair share of the mineral wealth. Several other companies too have been challenged on the same ground.
Mining in the country accounts about 4 percent of the GDP.
Last week President John Magufuli ordered for a review of the contract of Petra and is learned to have ordered law enforcement agencies to investigate the allegations of under-declared diamond exports.
On August 31 diamonds of the company were seized in Dar es Salaam while being exported to Belgium’s Antwerp city.
Meanwhile, Petra argues to have conducted all operations in a transparent manner and also with full compliance with legislation.
The Williamson mine contributed 18 percent to the total revenue of Petra in 2016. The company has 1,400 employees.
Bank of America Merrill Lynch reveals the Williamson mine is worth only 3 percent of the company’s estimated net present value.
Acacia Mining, the biggest gold miner in the country, too has threatened to stop its underground work if its shipments are stopped and the employees are questioned.