DiamondCorp Plc (LON:DCP) has been ordered to shut down underground operations at its Lace mine after a fire in a dump truck.
No one was injured in the incident and management said it was "struggling to find logic" in the instruction that came with the Section 54 notice from the South African Department of Mineral Resources (DMR) and is considering its options including legal action.
The authority has also requested "external ventilation audit team to inspect the mine for smoke and other gases".
The firm reckons mining at the site in South Africa will be suspended for a least a week.
Shares sank 40% to 1.725p on the day.