LONDON (ShareCast) - (Sharecast News) - Petra Diamonds updated the market on the 7 November tailings storage facility wall breach at the Williamson mine in Tanzania on Wednesday, reporting that its assessment team found there was a "low risk" of further breaches of the facility, or a breach of the New Alamasi water dam.
The London-listed company said Williamson Diamonds (WDL) had constructed an initial six metre-high wall to close the breached wall area.

As a precautionary measure, WDL also constructed containment walls upstream and downstream of the New Alamasi water dam, while buttressing of the New Alamasi water dam wall was underway.

It said various diversion trenches were also being built to prevent any build-up of water, and to enable rainwater to flow into the surrounding rivers and streams.

"A total of 12.8 million cubic metres of water and tailings material were released from the tailings storage facility as a result of the breach," the board said in its statement, adding that a total area of 3.57 square kilometres was covered with the material on Williamson's mine lease area, with 1.52 square kilometres outside the mine lease area.

"Environmental work to date confirms the tailings material which flowed out of the tailings storage facility is inert.

"Water and tailings material samples were taken by the Tanzania government's Chemist Laboratory Authority, which confirmed that no dangerous chemicals were found and that all chemicals were within normal parameters."

That, Petra reported, was confirmed by separate, private laboratory tests.

It added that analysis was underway with the assistance of independent experts to ascertain appropriate measures for the clean-up or remediation of affected areas.

"Petra reconfirms that no fatalities or serious injuries occurred as a result of the incident.

"A temporary rehousing scheme is being planned for the families affected by the breach; interim accommodation and humanitarian relief, including psycho-social assistance, continues to be provided to those affected.

"Valuation, land and socio-economic surveys are being implemented with all the necessary approvals from the government."

A socioeconomic study, supported by an external social impact specialist, was "well-advanced" to determine socioeconomic impacts, the board added.

WDL, along with local, regional and national authorities, was continuing its "extensive engagements" with local communities to ensure key stakeholders were kept informed of WDL's response, including planned remediation activities.

WDL and Petra said they were "appreciative" of the continued cooperation and assistance provided by government, community leadership and affected parties.

"Following the visit of a technical team that included independent external specialists, the preliminary assessment concluded that the failure mechanism was subsidence of a portion of the east wall of the tailings storage facility by around 1.5 metres, that enabled the water to crest the wall, initiating the breach.

"The root cause of the subsidence has not been determined and will require a forensic geotechnical investigation to be completed."

That work would be undertaken by an independent company specialising in tailings dam design and management, the company confirmed.

The cost and timing of the investigation would be available after a detailed scoping process was complete, but initial indications were that this exercise would take between six and 12 months.

"In light of the failure of the existing facility, the design of the new tailing storage facility is currently under review.

"This is only expected to be finalised in February, which will determine the additional construction work required to make the facility operational.

"It is now expected that this new facility will take longer than initially anticipated to become operable."

At the same time, a further potential option of repairing and using the existing facility was being explored as a long-term solution, but that was subject to the outcome of the geotechnical investigation.

"As a result of the additional work required to progress these long-term solutions, interim deposition options are being developed that may enable the Williamson mine to resume production around the middle of 2023.

"These interim options may include utilising a portion of the existing or new tailings storage facility.

"The Williamson mine will not resume any deposition under these interim options until it has been confirmed that it is safe to do so, and any necessary regulatory approvals have been obtained."

Further work is being conducted between WDL, Petra's technical team and external specialists to determine the best possible options to safely restart production, and as soon as possible, the directors explained.

"As previously stated, accelerated waste stripping and planned maintenance activities will continue in order to minimise the impact of lost production.

"This interim plan will be adjusted as we progress the interim options referred to above.

"WDL is considering additional financing options to provide support during this period and is engaging with the government of Tanzania regarding the sale of the previously blocked-and-confiscated diamond parcel, the proceeds of which the government of Tanzania has agreed to allocate to WDL under the framework agreement entered into in December 2021."

Petra currently has a 75% shareholding in WDL, with the government of Tanzania owning the remaining 25%.

At 0837 GMT, shares in Petra Diamonds were down 5.79% at 89.5p.

Reporting by Josh White for Sharecast.com.

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