By Arathy S Nair

(Reuters) - Petra Diamonds Ltd (PDL.L) expects full-year core earnings to come in about 10 percent to 15 percent below consensus, the miner said on Monday, sending shares plunging as much as 20 percent.

The profit warning comes after a string of issues at the company, including a three-week strike at its South Africa operations and the blocking of a consignment of diamonds in Tanzania that led the company to flag a possible breach of two of its debt covenants in October.

Petra, which was accused of under-declaring the value of the stones, is caught up in an industry-wide crackdown by the Tanzanian government in an effort to reap more revenue from its minerals. Petra has denied this.

London-listed Petra said earnings before interest, tax, depreciation and amortisation (EBITDA) to be hit by the strengthening of the South African rand. Miners in South Africa pay costs in rand and earn revenue in dollars.

Full-year EBITDA was seen at $256.51 million, according to a Thomson Reuters poll of 13 analysts.

BMO Capital Markets analysts cut its estimate for Petra's 2018 earnings after the trading announcement.

"Petra has a number of headwinds and while we like the longer-term story... in the near-term we expect the shares to remain under pressure until some clarity is received on the issues facing it," RBC analysts wrote in note.

Shares in London fell as much as 21 percent but later traded 13 percent lower to 68 pence by 0916 GMT. Petra was the biggest loser on the London Stock Exchange.

The company, which is currently at peak debt levels at $644.7 million, said net debt is expected to fall to $560 million to 600 million by June 30. It also started formal discussions with its lenders to evaluate the covenants.

The London-listed company cut its production forecast to 4.6-4.7 million carats (mcts), below its previous forecast of 4.8-5.0 mcts, primarily due to lower grade diamonds from its Cullinan mine in South Africa.

Petra said it would mine less of the small, low value diamonds from its Cullinan mine as it would be uneconomic and as the company looks to focus on value rather than volume.

While this could lead to lower production, revenue per tonne is expected to be materially in line with estimates due to higher average diamond prices, Petra said.

It expects overall 2018 revenue to remain in line with current consensus, including the expected sale of the blocked consignment of diamonds in Tanzania.

(Additional reporting by Zandi Shabalala in London; Editing by Saumyadeb Chakrabarty, editing by Louise Heavens)