Lucapa Diamond's collaboration with high-end diamantaire Safdico International, a Graff subsidiary, is assisting the firm in increasing margins at its Lulo and Mothae mines in Angola and Lesotho, respectively.
As a preferred customer of the company’s 40%-owned Sociedade Mineira Do Lulo (SML), Safdico is eligible to purchase up to 60% of Lulo's yearly rough production.
Lucapa managing director Stephen Wetherall told Rough & Polished in an exclusive interview to be published shortly, that the cooperation with Safdico provides an additional financial margin of roughly 28% on Lulo diamonds and 25% on Mothae diamonds.
“Our initiatives have resulted in very good additional earnings coming through and assisting the EBITDA and in effect for the very first time we going to be splitting out the component of cutting and polishing in terms of what it contributes on a per carat basis or per period basis in our communication in July for the second quarter,” he said.
Wetherall, on the other hand, stated that while the cutting and polishing component provides good extra revenue, their concentration is on ensuring that the mines are incredibly lucrative on a raw basis "because that's what makes them tick."
“The value of creative initiatives and cutting and polishing and branding, going forward, is additional cream or cherries on the cake that we want to keep at it and we believe it's got a strong future to play in our strategy,” he said.
In 2022, Lulo gained an extra $1.4 million in profits from cutting and polishing activities. During the same period, Mothae earned $800,000 in margins from cutting and polishing activities.
Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished
