Canada-headquartered Lucara Diamond Corp has extended its supply agreement for diamonds larger than 10.8 ct with HB Antwerp to December 2022.
Under the terms of the agreement, the purchase price paid for each 10.8-ct-plus rough diamond is based on the estimated polished outcome, determined through state-of-the-art scanning and planning technology, with a true up paid on actual achieved polished sales thereafter, less a fee and the cost of manufacturing.
Lucara first announced the HB agreement in July last year, having made a deliberate decision in March 2020 not to tender any of its larger inventory amid the uncertainty caused by the global coronavirus crisis.
CEO Eira Thomas says early results from the strategy warrant an extension of the agreement to determine if superior pricing and market stability for large, high-value diamonds can be sustained.
"More than a supply agreement, this collaboration structurally embeds a new transparent and sustainable way of working in the diamond value chain. For the first time, different partners of the value chain are fully aligned, sharing data and information throughout the process from mine to consumer,” comments HB Antwerp CEO Oded Mansori.
The large, high-value diamonds more than 10.8 ct in size from the Karowe mine, in Botswana, account for about 70% of Lucara’s yearly revenues.