RAPAPORT… Lucapa Diamond Company has created a partnership with a high-end diamantaire to cut and polish a portion of rough from the Mothae mine in Lesotho.
The miner sought the deal after coronavirus lockdowns halted sales of its diamonds through regular tenders in Belgium, the company said Tuesday. The diamantaire purchased 3,963 carats from Mothae for $2 million, or $505 per carat. That included a high-quality, 64-carat rough diamond.
Under the terms of the agreement, Lucapa received the fee for the rough up front, and will also get half of the purchase price of the polished when it is sold.
“It was pleasing to still see some demand for the higher-quality Mothae-type production despite the current macroeconomic uncertainty brought about by COVID-19 hindering the marketing of diamonds and prices generally,” said Lucapa CEO Stephen Wetherall. “The sale of diamonds into the cutting and polishing partnership in this environment provides Mothae with a level of price protection in that Mothae should receive additional margins from the onward sale of these diamonds.”
Lucapa also has a partnership with Graff-owned subsidiary Safdico for the manufacturing of rough from its Lulo deposit in Angola.
Image: The Mothae mine. (Luapa Diamond Company)
Lucapa Inks Polishing Partnership for Mothae
The Bottom Line
- Lucapa sold 3,963 carats of Mothae rough for $2 million to a diamantaire, including a 64-carat high-quality stone.
- The agreement provides Lucapa with upfront payment plus half the proceeds from polished diamond sales.
- The partnership offers price protection and additional margins despite COVID-19-related market uncertainties.
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