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Sales Downturn at Angola Mine Hits Lucapa

Aug 1, 2022 11:14 AM   By Joshua Freedman
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Lucapa Diamond Company’s revenue fell 36% year on year to $21.8 million in the second quarter, reflecting an unfavorable comparison with last year’s sales surge.

A year earlier, the miner held a special tender of seven large, high-value rough stones from the Lulo deposit in Angola, it explained Thursday.

In addition, the company saw a decline in polished revenues resulting from manufacturing partnerships for Lulo rough. Many sales originally expected in 2020 were pushed back to 2021, skewing the comparison for the most recent quarter.

Total sales from the Lulo mine fell 47% year on year to $15.6 million. While overall sales volume was higher, the average price dropped 55% to $1,993 per carat because of the large-stone tender a year earlier. Income from partnerships — Lucapa’s share of polished margins — slid 61% to $700,000. In 2020, South Africa-based manufacturer Safdico agreed to buy 60% of Lulo’s annual rough production and share the polished proceeds with Lucapa.

Revenue from Lucapa’s Mothae mine in Lesotho, a smaller part of the business, gained 27% to $6.2 million.

The current market uncertainty caused by high inflation and China’s lockdowns will probably ease in the second half amid seasonal improvements during the post-summer and festival periods, Lucapa pointed out.

“As the natural rough-diamond industry is likely to continue seeing a reduced natural rough supply environment going forward, Lucapa expects this to favorably impact natural rough-diamond prices in the medium to long term,” the miner commented.

Image: Rough diamonds from the Lulo mine. (Lucapa Diamond Company)
Tags: Angola, Joshua Freedman, Lesotho, lucapa, Lucapa Diamond Company, Lulo, Mothae, Safdico
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