Petra Diamonds (LSE: PDL), the mining company that partially owns – together with the Government of Tanzania (GOT) – and operates the Williamson diamond mine in Tanzania, has published its Trading Update for the 6 Months ended 31 December 2019, showing that the ROM production at the mine increased 3% to 214,888 carats.
This is higher than the previous forecasts of H1 FY 2019 of 208,064 carats, demonstrating the continued steady operational delivery of the mine.
Williamson is Tanzania’s only important diamond producer. The mine is an open-pit operation based upon the 146-hectare Mwadui kimberlite pipe, which is the world’s largest economic kimberlite to have seen continuous mining.
The ownership of the mine is split between Petra Diamonds (75%) and the GOT (25%), and its potential is +50 years.
In FY 2019, the Williamson mine produced a total of 386,016 carats versus 328,681 carats in FY 2018 (+17%). And in 2019, Petra Diamonds sold a total of 402,329 carts from the mine, versus 253,524 carats in FY 2018 (+59%), for a total of USD 93 Million versus USD 68.5 Million.
However, the average price per carat has fallen by -14% to USD 231 versus USD 270 in 2018. But Richard Duffy, Chief Executive of Petra Diamonds, commented that rough diamond pricing has modestly improved moving into Q3 2019.
Meanwhile, the company remains in discussions with the GOT and local advisers in relation to various issues, including the overdue VAT receivables and the blocked parcel.
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).
Diamonds in Tanzania are found mainly in the Williamson diamond mine, which is located south of the town Mwanza in northwest Tanzania.