UPDATE 2-Tanzania orders review of Petra mine contract, seeks resignations over probe

over probe@ (Adds details, background)

DAR ES SALAAM, Sept 7 (Reuters) - Tanzanian President John Magufuli said on Thursday he had ordered a review of a local contract belonging to Petra Diamonds Ltd and asked senior public officials to resign over the outcome of a probe into the mining sector.

"I have endorsed all the recommendations of the parliamentary probe committees for the review of the Williamson diamond mine contract," Magufuli said in a televised broadcast.

London-listed Petra has a 75 percent stake in the mine, while the government owns the rest. Shares in the company were down 1.5 percent at 1123 GMT.

A spokeswoman for Petra was not immediately able to comment.

A parliamentary committee said there were "gross irregularities" in the manner in which the Tanzanian government diluted its shareholding in Williamson from an initial 50 percent to the current 25 percent.

Magufuli said he had also ordered law enforcement agencies to investigate allegations of under-declared diamond exports.

Magufuli's actions are a continuation of a crackdown in the mining sector.

He has sent shockwaves through the mining industry in Africa's fourth-largest gold producer since his election late in 2015 with actions he says are aimed at ensuring that mining companies pay a fair share of taxes.

Tanzania has passed new laws to increase mining taxes, to force companies to renegotiate their contracts and to allow the state to own up to 50 percent of shares in mining companies.

In March, it banned exports of copper concentrate or mineral sand for processing abroad, which particularly hit gold miner Acacia Mining, the biggest in the country.

Magufuli also instructed law enforcement agencies to investigate allegations of tax evasion and corruption in diamond and tanzanite mining.

Another parliamentary committee that investigated tanzanite mining said there was massive smuggling of the purple-blue gemstone.

Tanzania, the worlds only source of tanzanite, banned exports of the raw gemstone from April 2010.

The parliamentary committee said its investigation revealed that Tanzania had received just 5.2 percent of revenues from global tanzanite trade over the past decade.

"It's unacceptable that we have been getting just 5.2 percent of tanzanite revenues as a nation ... this is shameful," Magufuli said.

"I am instructing our law enforcement agencies to swiftly investigate all these allegations contained in these reports against these public officials ... we cannot be truly independent if our natural resources are being plundered."

Tanzania's Prime Minister Kassim Majaliwa said the parliamentary reports exposed "massive looting and corruption" in the country's mining sector.

Magufuli fired his mining minister and the chief of the state-run mineral audit agency in May after the release of another audit into possible undeclared exports by mining companies to evade tax, at the time targeting gold. (Reporting by Fumbuka Ng'wanakilala; Editing by George Obulutsa and Dale Hudson)