Diamonds / Industry

Lucara Signs New 10-Year Deal With HB Antwerp


Less than six months after Lucara Diamond Corp. severed its 10-year sales deal with HB Antwerp, the miner has signed a new contract with the company.

The deal, which seems similar to the one that Lucara canceled last September, will require Lucara to sell all its rough over 10.8 carats to HB. In return, Lucara will get a percentage of the final polished price, minus HB’s margin. If approved by Lucara’s lenders, the pact will be effective retroactively to Dec. 1, 2023.

Lucara’s sole production is the Karowe mine in Botswana. The government of Botswana plans to pay $65 million for a 24% share in HB Antwerp, which was founded by four industry veterans in 2020 and signed its first contract to buy Lucara’s biggest stones that July, during the COVID-19 pandemic.

In November 2022, Lucara and HB Antwerp extended the deal by 10 years. But after Eira Thomas stepped down last year as Lucara’s CEO, her replacement, William Lamb, scuttled the arrangement, citing “a material breach of financial commitments by HB.”

The Botswana government—which had already announced its intention to take a stake in HB Antwerp—didn’t seem pleased. In November, Lamb said on a conference call that the local authorities wanted Lucara to keep selling the big diamonds based on the HB model. And in December, Africa Intelligence reported that Botswana president Mokgweetsi Masisi and his mining minister wanted the deal reinstated.

A statement from Lucara yesterday spells out anticipated benefits of the new pact, including regular cash flow that will support Karowe’s plan to mine underground; alignment with the Botswana’s government’s intentions to receive more polished revenue and diversify downstream; and streamlined evaluation, sales reporting, and payment methods.

HB has had a remarkable comeback since last September, when the company was hit by a series of blows: In addition to the Lucara cancellation, HB’s founders were feuding, and Botswana was considering reneging on its commitment to buy 24% of the company. But now the founders’ quarrel has been resolved, and the Lucara and Botswana deals are both back on.

Top: The Karowe diamond mine (photo courtesy of Lucara)

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By: Rob Bates

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