Tanzania Diamond Production Up 12% in H2 2016

Tanzania Diamond Production H2 2016

Tanzania’s diamond production from the Williamson diamond mine in northwest Tanzania rose by 12% in H2 2016 to 106,831 carats (ca), from 95,841 ca in H2 2015.

This was indicated in the latest trading update, published by the majority owner of the mine, Petra Diamonds (LSE:PDL), on January 23rd, 2017.

The update notes that in H2 2016, the commissioning of a new mill section at the Williamson mine commenced and is expected to be completed during Q1 2017.

“Upon commissioning, both throughput and grades will improve […],” Petra indicates.

Petra further notes: “We are seeing some evidence of improving retail demand, with certain jewelry retailers reporting slight growth in sales for the 2016 festive period and at least narrowing declines being noted by others.”

“Signs of stabilization in the rough diamond market are evident with steady demand across the majority of size ranges, except in the smaller, lower value categories which have been experiencing some pressure due to the Indian government’s demonetization of high value banknotes and the subsequent impact of smaller midstream players on liquidity in the Indian diamond market,” the company notes.

Petra concludes that it is expecting market conditions to remain stable in H1 2017.

Tanzania Diamonds

Diamonds in Tanzania are found mainly in the Williamson diamond mine, 23 kilometers (14 mi) northeast of Shinyanga, in the northern part of the country.

Petra Diamonds, through its subsidiary Williamson Diamonds Limited, holds 75% of the ownership rights over the mine, while the Government of Tanzania owns the remaining 25%.

In 2015, the company produced 202,265 ca and plans to increase its production to 350,000 ca per annum in 2017.

In 2015, Tanzania was the 10th largest diamond producer in Africa after Botswana (17.3m ca), Angola (7.1m ca), South Africa (6m ca), the Democratic Republic of Congo (3.15m ca), Namibia (1.92m ca), Sierra Leone (0.5m ca), Zimbabwe (0.5m ca), Lesotho (0.35m ca) and Ghana (0.24m ca).

According to Petra Diamonds, the Williamson mine contains large diamond resources of approximately 38.1m ca.

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