PETRA Diamonds shares at London Stock Exchange continued to plunge as it faces a review of its local mining contract and investigation into allegations of under-declared diamond exports.
President Magufuli ordered a review of Petra's contract over the Williamson diamond mine in Kahama, Shinyanga Region last week after a parliamentary investigative committee on diamonds and tanzanite mining accused the industry of being rife with corruption and tax evasion, with negligence by government officials causing losses of millions of dollars for the country.
Two reports on the diamond and tanzanite sector were submitted to President Magufuli, with the president ordering the review and endorsed all the recommendations of the parliamentary committees in a live broadcast from Dar es Salaam.
President Magufuli had also asked senior public officials to resign over the outcome of an investigation into the mining sector. By Friday close of business at 5:05 PM GMT+1, shares of the mining company at London Stock Exchange had tumbled to 89.50p from 91.65p of 8.am. Petra owns 75 percent of the stake in Williamson Diamonds, with the remaining shares held by the government.
The Williamson mine accounted for 18 percent of Petra's revenue last year. It said in a statement that its business was conducted in a transparent manner and that it had complied with all legislation in Tanzania.
The government said on Saturday it would confiscate diamonds whose value it put at $29.5 million belonging to the mining company after it accused the miner of under-declaring its mineral exports.
The diamonds were seized at the main airport in Tanzania's commercial capital Dar es Salaam on August, 31 as they were being exported by Williamson Diamonds Ltd to Antwerp, Belgium.
The government first confirmed the confiscation on Thursday, when President John Magufuli was receiving audits by parliamentary committees on the mining sector.
"While Williamson Diamonds Ltd declared in its documentation that the value of the diamonds was $14.798 million, a fresh valuation done by the government established that the actual value of the diamonds is $29.5million," Finance and Planning Ministry said in a statement.
"Among the legal action to be taken include the nationalisation of all the diamonds seized after it was established that there was cheating involved in declaring the actual value of the minerals," it said.