Monday , April 15 2024

Petra upbeat after lifting of export ban

Petra Diamonds is optimistic to move out of the murky waters following the end of labour dispute in South Africa and the lifting of an export ban in Tanzania.

Johan Dippenaar, the company’s Chief Executive Office has allayed fears of a possible breach of loan terms, as a threat to the company.

“We don’t regard it as a high risk to the business,” said Dippenaar, adding that the mining firm was in talks with its banks on a monthly basis.

Petra Diamonds is optimistic finances will improve to cover loan obligations.

“Should we not make it, we know we will have a sensible discussion with the bankers,” he said.

“As we turn cash flow positive between January and June then that pressure comes off.”

Petra’s net debt increased 11% to $614-million in the three months ending in September versus the prior three months, mainly due to a lack of sales from its Williamson mine in Tanzania.

As part of a wider crackdown in its mining industry, Tanzania blocked the export consignment after accusing the company of under-declaring the value of the stones by about half. Petra denied this.

Tanzania hopes to boost government revenues and stamp out alleged corruption through sweeping new laws introduced in July.

“You can’t blame governments for making sure that the country gets its fair share and those values are properly recorded within the country and so forth,” Dippenaar said, adding he hoped “cooler heads” would prevail.

Tanzania has since lifted a wider ban on diamond exports and Petra is currently preparing its second consignment of diamonds for export since the ban was withdrawn.

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