Shifts Focus to the Success Commission of Karowe Underground Expansion Project
Lucara Diamond Corp has sold its digital diamond sales platform, Clara, as it refocuses on the underground expansion of its world-renowned Karowe diamond mine.
Clara, a digital marketplace for rough diamonds, has revolutionized the way diamonds are sold by connecting buyers and sellers through advanced technology.
Despite its innovative approach, Lucara has decided to part ways with the platform in order to strengthen its core operations.
The Clara platform will be sold to its original founders—HRA Group of Companies and Eira Thomas, Lucara’s former CEO.
The sale, which is valued at $3 million in cash and 13.4 million in Lucara shares (approximately $4.3 million at current share prices), signals a strategic shift for the diamond mining giant.
Lucara’s current president and CEO, William Lamb, emphasized that while Clara provided a valuable digital channel for rough diamond sales, scaling the platform to include other producers’ output has proven challenging.
This obstacle became more pronounced with Clara being under Lucara’s ownership, a single-player diamond producer.
“The divestiture of Clara enables us to intensify our strategic focus on maximizing returns and long-term value creation at our world-class Karowe diamond mine,” said Lamb.
“Our future growth lies in the successful execution of the Karowe underground expansion project, and Lucara remains confident that Clara’s technology will continue shaping the diamond industry.”
Clara accounted for 12 percent of Lucara’s first-quarter diamond revenue in 2024.
However, most of the company’s sales came from its agreement with HB Group, a cutting and polishing firm.
Out of $4.9 million in Clara sales, only 33 percent were third-party diamonds, with the majority originating from Lucara’s Karowe mine in Letlhakane.
Despite selling its 100 percent interest in Clara, Lucara will retain a 3 percent net profit interest on Clara’s earnings.
It has also secured a five-year supply agreement with Clara for diamonds ranging between one to 15 carats.
Lucara’s focus is now firmly on the Karowe underground expansion, a project vital to its future.
Originally estimated at just over $500 million, the project’s cost has risen to $683 million due to a 25 percent increase in capital expenditure and an 18-month delay in the commissioning schedule.
The delay, combined with a drop in diamond prices and slow market recovery, has placed considerable strain on Lucara’s finances.
By June 30, 2024, Lucara had spent $336.3 million on the expansion and had committed a further $69.7 million in capital during the second quarter.
Despite these challenges, Karowe mine continues to make headlines for its remarkable diamond discoveries.
In recent years, it has produced some of the world’s largest diamonds, including a 1,094-carat stone and the 2,492-carat behemoth, further solidifying its reputation as one of the globe’s premier diamond sources.
The Karowe underground expansion project is expected to be commissioned in the first half of 2028, ushering in a new era of diamond mining at one of Botswana’s most celebrated mines.
