DIAMOND MARKET LOOKS GOOD FOR LUCARA
Strong diamond market conditions prevailing this year have pumped optimism into Lucara Diamond, the operators of Karowe mine. Karowe is an independent diamond mine in Botswana which has become the well known operation for rare diamonds.
“Our outlook for the diamond market remains strong and with close to 20 years of future mining now ahead of us at Karowe, Lucara is highly levered to an improving diamond price environment, particularly in respect of large, high value gem diamonds, the hallmark of Karowe’s production profile,” said President and Chief Executive Officer of Eira Thomas.
Market indications point out that the diamond market began in 2021 in a healthier position than it had at any stage over the past five years, resulting in increasing price performance in virtually all sizes and quality of diamonds in the first quarter of 2021. According to Lucara, the development comes after a challenging year in 2020 as a result of the global COVID-19 pandemic, characterized by global travel restrictions, low sales volumes, pricing pressure and overall, difficult economic conditions for miners, manufacturers, retailers and consumers. Lucara further highlighted that the diamond market remained buoyant following a strong holiday sales period, particularly in China and the United States.In addition, the company attributes the development to careful rough diamond supply management by the producers that has helped to re-balance polished diamond inventories and stabilize the market overall. COVID-19 remains a key concern, however, even as vaccination programs are being rolled out in many countries around the world. “India, a major manufacturing Centre for diamonds, is of particular concern heading into the second quarter as infection rates have increased dramatically, resulting in new lock-down measures,” said Thomas.
Meanwhile, Lucara held diamond sales in the first quarter of 2021 through a combination of regular tenders, and the Clara platform, for diamonds less than 10.8 carats, and through HB under the supply agreement for those diamonds greater than 10.8 carats. The Company realized revenue of $53.1 million or $579 per carat from the sale of 91,760 carats. Price recovery was observed in most size and quality classes. “Lucara has bounced back in the first quarter of the year, demonstrating its resilience at a time of continued uncertainty in respect of the ongoing COVID-19 pandemic. Our solid performance in the first quarter reflects a stronger business environment, Lucara’s continued focus on operational discipline and our innovative approach to sales,” said Thomas.