Lucara extends diamond sales agreement with HB

Lucara Diamond has extended its diamond sales agreement with HB Trading to sell +10.8 carat rough diamonds produced from its wholly owned Karowe mine until December 31, 2032. 
The diamond company first partnered with HB in 2020 to sell Karowe's large, high-value diamonds that have historically accounted for about 60% to 70% of its annual revenues. 
"It has been more than two years since Lucara initiated this transformational approach to sales of its' highest value diamonds, working in collaboration with HB to create alignment along the value chain, differentiating diamonds from Karowe on the basis of provenance, excellence in manufacturing and a commitment to complete transparency for all stakeholders,” said Lucara chief executive Eira Thomas.
“For the first time in our ten-year history, we have insight [into] what becomes of each and every +10.8-carat rough diamond produced from our mine, participating in each step of the planning and manufacturing process right through to the final polished sale.  Not only has this approach stabilised prices for our most valuable production segment, [but it has also] demonstrably grown demand, a core objective.”
Under the Agreement, Lucara's +10.8 carat production is sold at prices based on the estimated polished outcome of each diamond, determined through state-of-the-art scanning and planning technology, with a true-up paid on actual achieved polished sales thereafter, less a fee and the cost of manufacturing. 
It said the pricing mechanisms of the agreement with HB result in complete transparency within the value chain, creating important alignment between all participants in the value chain, and delivering regular cash flow at superior prices for this important segment of our production profile.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished