Lucara Diamond Corp. and HB Antwerp have extended their agreement, announced last year, which will require HB to buy all the 10.8 ct. rough diamonds from the Karowe mine in Botswana for another two years.
The original deal, which was—and remains—atypical for the diamond industry, began in July 2020 and was due to expire at the end of last year.
Karowe has produced an unusual amount of high-value diamonds, and those stones account for approximately 70% of Lucara Diamond’s annual revenue.
The deal says that the purchase price paid for each 10.8 ct. rough diamond will be based on the stone’s estimated polished outcome, determined through Lucara’s Clara platform, minus a fee for manufacturing. If the final polished sale exceeds the Clara estimate, Lucara could earn extra, though it does not lose if the polished outcome falls short.
“More than a supply agreement, this deal structurally embeds a more transparent and sustainable way of working in the diamond value chain,” said Oded Mansori, CEO of HB Antwerp, in a statement. “For the first time, different partners of the supply chain are fully aligned, sharing complete data and information throughout the process from mine to consumer.”
Photo © Lucara Diamond Corp.