Struggling Petra Diamonds (LON:PDL), which put itself up for sale in June, is facing fresh issues as it faces accusations of human rights abuses at its Williamson mine in Tanzania resulting from the actions of its security guards.
The South African company said on Wednesday that UK-based law firm Leigh Day had filed claims in the High Court of England on behalf of 32 individuals. The accusations against Petra and the mine operator Williamson Diamond Limited (WDL) include personal injuries and deaths suffered by anonymous individuals at the diamond the mine, allegedly caused by security staff, it said.
The company has also received a letter from RAID, a UK-based NGO, regarding similar accusations from local residents and “others relating to actions by WDL, its security contractor and others linked to WDL.”
Petra said it took the allegations “extremely seriously” and was starting an independent investigation through a specialist third party. WDL has already begun its own investigation, it noted.
Illegal miners incursions
The Africa-focused diamond producer noted its Williamson mine has been the target of illegal artisanal miners “for some time” due to challenges in securing the large perimeter of the licence area.
“This illegal mining activity is managed by WDL and the local government authorities on an ongoing basis,” it said.
Petra is not foreign to the incursion of illegal miners into its operations. Last year, it opened up some of its Koffiefontein mine’s tailings, in South Africa, to small scale miners. The move aimed at tackling illegal activities and solve some issues caused by artisanal miners at the asset.
It previously carried out a similar exercise at Kimberley, in Northern Cape, where small scale miners operated “the floors” of the property — an area previously worked by Kimberley’s founding miners.
That project, kicked off in 2017, wasn’t a complete success. Its then joint venture partner, Ekapa Mining reported a year later it was still spending R3 million (about $180,000) a month in security to keeping individual out of its operating boundaries. Petra sold its stake in the Ekapa partnership in 2018.
The diamond producer has been hit by a triple whammy of weak market conditions, power emergencies in the home country and the ongoing effects of covid-19.
Petra tried to turn around its fortunes after piling up debt to expand its flagship Cullinan mine in South Africa. The renowned mine, where the world’s largest-ever diamond was found in 1905, produces about a quarter of the world’s gem-quality diamonds. It is also the source of the vast majority of blue stones.
The company failed in May to make an interest payment on a $650 million bond, but won some breathing space from creditors who said they would not declare a default until August.
It also cancelled May and June tenders because of travel restrictions and low demand from the midstream.
Petra shuttered Williamson in April. The mine is 75% owned and 25% by the government of Tanzania.