Diamonds / Industry

Botswana Still Wants HB Antwerp Model, Even Without HB


Botswana miner Lucara Diamond may have nixed its agreement to sell all its big stones to HB Antwerp, but the country’s government still wants Lucara to sell its choicest gems through such an arrangement, CEO William Lamb told analysts during a Nov. 13 conference call.

Under the now-canceled 10-year deal, Lucara sold HB its Karowe mine’s entire production of “specials”—diamonds over 10.8 carats—and received a percentage of the final polished sale price. Lucara’s former management had said this method yielded better results than selling via auction, as it increased the miner’s alignment with its downstream partner.

Lamb said on this week’s call that the Botswana government prefers that model and wants to “continue to move forward with” it—even if Lucara has to find a new partner.

“We are not going to be selling our 10.8-carat stones through the tender process as of today,” Lamb said, according to a SeekingAlpha transcript. “We are still waiting for approval from the government of the Republic of Botswana for an official approval to be able to sell our 10.8 carats either through tender or through some other mechanism. If we do get approval, then we will message to the market how those [diamonds over] 10.8 carats are going to be sold, whether it’s going to be another agreement similar to HB. That is what we are busy working on at the moment.”

In March, Botswana President Mokgweetsi Masisi announced that his government would take a 24% share in HB Antwerp, in a deal that called for HB to purchase large stones from the government-owned Okavango Diamond Company. Few details on that arrangement have been made public, but in his Nov. 5 State of the Nation address, Masisi said that “due process of detailed, legal and commercial due diligence is now ongoing to finalize the deal.”

Top: A 1,080 ct. rough stone Lucara found this year at its Karowe mine (photo courtesy of Lucara Diamond)

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By: Rob Bates

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