IN THE ROUGH: Lucara workers sort diamonds at Botswana’s Karowe Mine
Why the Vancouver-based miner continues to find more big diamonds than anyone else
It’s no accident that Lucara Diamond Corp. has, over the past seven years, unearthed a third of the world’s diamonds in excess of 300 carats. Granted, the Vancouver-based, Toronto Stock Exchange–listed company’s Karowe mine in Botswana is extraordinarily rich in such rocks. But where other diamond miners may have accidentally crushed their big stones before they ever got to the sorting room, Lucara adapted X-ray transmission technology developed for the recycling and food processing industries to spot the diamonds’ atomic signatures and extract them from only gently crushed ore.
Lucara, which has 544 staff (the vast majority in Botswana), also experimented—not always successfully—in alternative ways of marketing its giant stones rather than going through the clannish network of brokers, cutters, polishers and auction houses centred in Antwerp, Belgium, that has long controlled the diamond trade. It launched a blockchain-based sales platform, Clara Diamond Solutions, that lets retail jewelers bid directly on uncut diamonds from producers. Instead of producers paying cutters and polishers to fashion a gem for them and put it on the market for the highest bidder, now a customer can potentially buy a rough diamond and have it custom cut for their purposes. Co-founder, president and CEO Eira Thomas believes the system could end up being more valuable than Lucara’s diamond production.
This past July, Lucara also struck a deal with Antwerp-based manufacturer HB Group to sell diamonds larger than 10.8 carats on the basis of their estimated price after polishing. Though COVID-19 has crushed the mainstream market for diamond jewelry, the demand for large stones has stayed strong as investors use them as a hedge against volatile stock and bond markets.
“Each of these pieces has taught us that challenges can lead to opportunities. You just have to have an innovative outlook,” Thomas says. “Business up until five to 10 years ago, for a lot of smaller companies, was around, Look, let’s not invent something new here. Let’s do something that’s tried and true. And quite frankly, the banks wouldn’t finance you unless it was tried and tested. I think now we’ve seen this real shift toward innovation where the mandate is about, OK, we can’t keep doing what we’re doing. We have to do something different, and that does involve a certain amount of risk, but by the way, there’s a huge upside if we get it right.”