The diamond miner’s sales fell through the cracks of a depressed diamond market that has been undergoing steep downturns.
Total revenues for the year totalled P2.4 billion compared to P2.9 billion recorded in 2022. The weak sales performance comes at the backdrop of a challenging year for rough diamonds with major diamond markets snubbing the shiny stones amid global recession fears throughout 2024. Lucara president and CEO, William lamb said the financials mirrored the business cycle posture of 2023 sighting resilience of the company at the clutch of the downturn. “Currently, slower than anticipated economic growth in China and a voluntary import ban on rough diamonds into India in Q4 2023 dampened the recovery of rough diamond prices towards the end of 2023.
“Changes in global economic conditions, consumer demand, geopolitical events, and industry-specific dynamics resulted in a challenging market in 2023 with reduced demand and downward pressure on both polished and rough diamond pricing, especially in the smaller size classes,” he said.
Lucara has also been investing massively in the Botswana operation’s underground project which received cash injections of P1.39 billion during the year under review. Last year the company revealed that it expected the underground project at its Karowe Mine to cost 25% more than initial budget estimates, rising to $683 million (P8.9 billion) and production from the new ore to be accessed two years later than originally forecast.
The full year results also noted several technical challenges which stalled project progress of the underground project with shortfalls on updated capital costs and production timelines, which had also impacted revenue forecasts over the period. “This update was initiated in response to slower than planned ramp up to expected sinking rates in 2022, and, to account for time incurred to complete grouting programmes while mining through the water-bearing geological zones. “These chemical grouting programs took longer than anticipated due to a combination of high-water volumes in the sandstone,” officials revealed. Karowe, which is situated near Letlhakane, has become world-famous for large diamond discoveries such as Lesedi la Rona, the Constellation and Sewelo. The underground mine represents Karowe’s future and is expected to yield additional revenues of $4 billion (P52.4 billion) up to at least 2040.
