Petra Diamonds Ltd. halted production at its mine in Tanzania after the government seized a parcel of diamonds suspected of being undervalued, as a dispute between the state and foreign-owned mining companies widens. Petra shares fell the most in 16 years.
Employees of the Johannesburg-based company are cooperating with the authorities in the East African nation who are investigating a shipment of 71,654 carats of gems that was blocked from export to Petra’s offices in Antwerp, according to a statement released in London on Monday.
Finance Minister Philip Mpango on Saturday threatened to nationalize the consignment after the government found the parcel of gems was worth more than the company said it was.
“Certain key personnel from Williamson are currently being questioned by the authorities,” according to the Petra statement. “Operations at Williamson have temporarily been stopped for health and safety and security reasons.”
Petra shares fell as much as 28 percent on Monday morning, the biggest intraday plunge since June 2001. The shares were 16 percent lower by 8:19 a.m. in London. Petra said in its statement a government agency is responsible for valuing gem parcels that are exported to Antwerp, not the company.
Bloomberg