Lucara enters new deal with HB
Mbongeni Mguni | Monday February 19, 2024 12:00
The new deal comes after Lucara terminated a previous 10-year deal with HB last September citing 'a material breach of financial commitments'.
A statement this morning from Lucara says the agreement covers stones larger than 10.8 carats.
The purchase price for the rough diamonds will be based on the mutual agreement of the estimated polished outcome.
“Our collaboration with HB Antwerp presents an opportunity to further enhance our position in the market, building on the knowledge of the past and the understanding of the quality of the polished diamonds produced from our Karowe diamonds,” Lucara CEO, William Lamb said.
From mid-2020, HB and Lucara had an agreement under which rough diamonds 10.8 carats and larger from Karowe Mine were sold to HB at prices based on the estimated polished outcome of each diamond, rather than the industry standard of using the rough price.
The estimated polished value was determined through state-of-the-art scanning and planning technology, with an adjusted amount payable by HB to Lucara on actual achieved polished sales, less a fee and the cost of manufacturing.
According to the agreement, if the final sales price secured by HB was higher than the initial estimated polished price, a top up payment was payable by HB to Lucara. Alternatively, if HB sold any of the diamonds to an end buyer for less than the initial estimated polished price, Lucara would refund the difference to HB.
The latest developments come after government provisionally allocated P890 million in the 2024-25 budget to take up a 24% equity stake in HB Antwerp, a move authorities have said will give the country a foothold in the diamond industry’s downstream.