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LONDON – Shares in the FTSE 250-listed mining firm Petra Diamonds are plunging on Monday morning after the company said a shipment was blocked from leaving Tanzania.
Petra said in a statement to the markets on Monday that a parcel of diamonds of around 71,000 carats has been stoped from leaving the country.
Diamonds have no centralised price so calculating the overall value of that parcel is tricky, and appears to be the main reason the parcel has been blocked.
According to a statement from the Tanzanian government and reported by Reuters, Petra values the parcel at around $14.8 million, while Tanzanian authorities believe it is worth more than double that at $29.5 million, and said that the firm is “cheating” with its valuations.
“Among the legal action to be taken include the nationalization of all the diamonds seized after it was established that there was cheating involved in declaring the actual value of the minerals,” the country’s Finance and Planning Ministry said in a statement.
Alongside the blockage of the shipment, Petra confirmed that “certain key personnel from Williamson [Petra’s Tanzanian mine] are currently being questioned by the authorities,” and that operations at the plant have been suspended “for health and safety and security reasons.”
The Williamson plant is owned 75% by Petra Diamonds, and 25% by the Tanzanian government.
As a result of the news that first emerged over the weekend, and was confirmed on Monday, shares in Petra are tanking, dropping as much as 27% in the first few minutes of trading. They have bounced significantly since then, but remain down by close to 10% as of 9.40 a.m. BST (4.40 a.m. ET), as the chart below illustrates: