Currently viewing Global edition

Lucara sees diamond price rise in Dec tender

Botswana-focused Lucara Diamond has rounded off a difficult 2019 on a positive note, with the company’s latest sales tender suggesting the market for rough diamonds may be turning a corner.
Lucara sees diamond price rise in Dec tender Lucara sees diamond price rise in Dec tender Lucara sees diamond price rise in Dec tender Lucara sees diamond price rise in Dec tender Lucara sees diamond price rise in Dec tender

Lucara Diamond's Karowe openpit mine in Botswana was commissioned in Q2 2012

Staff reporter

Lucara's final diamond tender of 2019 generated sales of US$52.9 million, 16% higher than expected, at an average price of US$548 per carat - some 40% higher than the company's average price achieved in Q3. The company's average sales price for 2019 was US$468 per carat.

Lucara has struggled over the past year as weak demand combined with low prices to send the company's share price tumbling. However, the latest announcement suggests the tide may finally be turning.

"Though it is too early to call a trend, prices achieved in our final sale of the year reflect a stronger, more stabilized market environment and continued strong demand for Karowe diamonds," said Lucara CEO Eira Thomas.

The tender, held on December 12, brought Lucara's total revenue for 2019 to US$192.5 million, beating the company's guidance of between US$170-180 million.

Thomas said Lucara "remains well positioned and highly levered towards further strengthening in diamond prices over the next 12-24 months as supply constraints from large, maturing, mines begin to manifest". 

"This bodes well, not only for our current openpit operations but also supports our plans for underground expansion to extend Karowe's mine-life to at least 2040, with the potential to generate an additional US$4 billion in revenue," said the CEO.

Its announcement comes just a day after De Beers pointed to better sales at its 10th sales sight of the year and also commented that it was seeing signs of "steady demand for rough diamonds".