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Lucara Sales Fall Amid Lack of High-Value Diamonds

Nov 3, 2022 8:31 AM   By Joshua Freedman
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Lucara Diamond Corp.’s sales dropped in the third quarter as the company supplied fewer large and expensive stones from its lucrative Karowe mine in Botswana.

Revenue fell 31% year on year to $49.9 million, while net profit slumped 86% to $1.8 million, Lucara reported Wednesday.

Sales of rough from Karowe declined 36% to $46.5 million, with volume down 15% at 99,301 carats and the average price falling 43% to $337 per carat. The remaining revenue came from sales of third-party goods on Lucara’s Clara online platform.

Management blamed a decrease in the number of high-value diamonds the company sold to HB Antwerp through the pair’s supply agreement. The Belgian manufacturer is contracted to buy all Karowe rough of 10.8 carats or more, with Lucara receiving a proportion of the final polished proceeds.

In the third quarter a year earlier, Lucara sold four pink diamonds and two white, type IIa stones — weighing 393.5 and 257.5 carats — to HB. As a result of the unfavorable comparison, revenue from the agreement plummeted 46% to $27.1 million.

“Despite the overall decrease in revenue recognized in [the third quarter], diamond-market fundamentals continued to support healthy prices as steady demand and some inventory shortages were reported,” Lucara said. Fluctuation in the availability of 10.8-carat production is expected, it added.

Output from Karowe slid 19% year on year to 78,879 carats for the quarter.

Image: The Karowe mine in Botswana. (Lucara Diamond Corp.)
Tags: Botswana, Clara, HB Antwerp, Joshua Freedman, Karowe, lucara, Lucara Diamond Corp., mining, Rapaport News, Rough Diamonds
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