Lucara Diamond Corp. is sinking an 800-meter shaft to ensure the kimberlite orebodies at its Karowe mine keep producing the 1,000-carat-plus gems that set it apart. However, the $550 million investment is potentially less significant than the second prong of the miner’s strategy.
Lucara sells about a quarter of its stones using a method pioneered by De Beers: cutters view packages of diamonds before bidding on them. But most of its profit, from stones over 10.8 carats in size and known in the industry as specials, comes from an agreement with HB Antwerp, which buys them. For those, the company receives polished rather than rough prices and the government earns more revenue.
Still, that’s easier said than done. Lucara’s production from Karowe, its only mine, was about 336,000 carats last year, with company revenue of $213 million. By comparison Debswana, the joint venture between Botswana and De Beers, produces about 22 million carats and its 2022 revenue was just under $4.6 billion. The government is said to get 80% of revenue from the joint venture.