Low risk of further breaches at Williamson TSF, but production restart pushed to mid-2023

30th November 2022 By: Schalk Burger - Creamer Media Senior Contributing Editor

LSE-listed diamond producer Petra Diamonds' assessment team has concluded that there is a low risk of further breaches of the tailings storage facility (TSF) at the Williamson mine, in Tanzania, or a breach of the New Alamasi water dam.

This follows the November 7 breach of the eastern wall of the TSF.

Petra subsidiary Williamson Diamonds (WDL) has built an initial 6-m-high wall to close the breached wall area. As a precautionary measure, WDL has also built containment walls upstream and downstream of the New Alamasi water dam, while buttressing of the New Alamasi water dam wall is under way.

Various diversion trenches are also being built to prevent any build-up of water and to enable rainwater to flow into the surrounding rivers and streams, Petra said a market update on November 30, regarding the TSF wall breach at the Williamson mine on November 7, 2022.

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 TSF by around 1.5 m 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. This work will be undertaken by an independent company specialising in tailings dam design and management.

The cost and timing of the investigation will only be known after a detailed scoping process is completed, but initial indications are that this exercise will take between 6 and 12 months to complete.

"In light of the failure of the existing facility, the design of the new TSF is currently under review. This is only expected to be finalised in February 2023, which will determine the additional construction work required to make the facility operational. It is now expected that this new TSF will take longer than initially anticipated to become operable.

"In parallel, a further potential option of repairing and using the existing TSF is also being explored as a long-term solution, but this is subject to the outcome of the geotechnical investigation. Updates on the progress of these potential long-term solutions will be provided in due course," the company said.

Further, 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 in the mid-2023.

These interim options may include using a portion of the existing or new TSF. 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 restart production safely and as soon as possible.

"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," Petra said.

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 has agreed to allocate to WDL under a December 2021 framework agreement.

"A socioeconomic study, supported by an external social impact specialist, is well advanced to determine socioeconomic impacts. WDL, along with local, regional and national authorities, continues extensive engagements with local communities to ensure key stakeholders are kept informed of WDL’s response, including planned remediation activities.

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

Additionally, Petra reconfirmed 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 socioeconomic surveys are being implemented with all the necessary approvals from the government.

On November 7, a total of 12.8-million cubic metres of water and tailings material were released from the TSF as a result of the breach. A total area of 3.57 km2 is covered with this material on Williamson’s mine lease area and 1.52 km2 outside the mine lease area.

Environmental work to date confirms the tailings material, which flowed out of the TSF, is inert. Water and tailings material samples were taken by the Tanzanian government’s Chemist Laboratory Authority, which confirmed that no dangerous chemicals were found and that all chemicals were within normal parameters. This was confirmed by separate, private, laboratory tests.

Analysis is under way, with the assistance of independent experts, to ascertain appropriate measures for the clean-up or remediation of affected areas, Petra said.

Petra's share price on the LSE fell by more than 5% on the morning of November 30.