WDL is the operator of the Williamson Mine and is currently 25%-owned by the government of Tanzania, while the remaining 75% stake is owned by Petra.
The diamond miner said it entered into the transaction documents with Pink Diamonds, a company nominated by Taifa.
Taifa remains the long-term technical services contractor at the Williamson Mine.
It said the payment of the $15 million purchase price will be satisfied through payments owed by WDL to Taifa for past technical services.
The payments will be received by Petra in instalments over the next five years.
Petra entered into a framework agreement with the government of Tanzania in December 2021, in which it was agreed that the former's effective interest in WDL would decrease to 63%, with the government’s interest increasing to 37%.
Upon completion of the agreement, Petra and Pink Diamonds will each indirectly hold an effective 31.5% interest in WDL, with Petra retaining a controlling interest.
Petra said it intends to use the $15 million proceeds from the transaction to continue strengthening its balance sheet.
"Our partnership with Taifa places Williamson on a stronger basis for the future. This new structure will reduce our equity interest in WDL, limiting our exposure in line with our stated objectives whilst retaining control and maintaining a share of the upside,” said Petra chief executive Richard Duffy.
“Williamson holds a unique place in the sector with its significant resource base and ability to produce high-quality pink diamonds. In a supply-constrained sector, this asset has the potential to become increasingly valuable.”
The book value of WDL's gross assets was $140.5 million as of June 30, 2022, with WDL recognising a profit before tax of $41.1 million in the financial year 2022.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished