Lucapa to Sell Mothae Rough Privately

RAPAPORT… Lucapa Diamond Company will sell rough from its Mothae mine in Lesotho directly to diamantaires through private partnerships, allowing it to secure higher prices for its production, it said Wednesday.

The new sales channel was approved by the government of Lesotho to overcome the challenges presented by the coronavirus, which make it difficult to sell at tender. Lucapa will also receive a portion of the profit when the polished goods are sold.

The miner has not yet signed a sales agreement with specific diamantaires, managing director Stephen Wetherall told Rapaport News Wednesday. It currently has a partnership deal with Graff-owned manufacturer Safdico for rough from its Lulo mine in Angola. While Lucapa has not determined for how long it will sell through these measures, it has maintained the option of selling through tenders. Once it secures contracts, it will determine what percentage of its goods it will sell into the partnership, Wetherall added.

“It has been a tough time for the industry over the past few months as a result of the pandemic,” he noted. “Mothae is a unique and important contributor to the Basotho nation. The recommencement of operations and implementation of the new marketing channel will see the full potential of the Mothae kimberlite mine unlocked. This is a similar marketing channel successfully implemented at Lucapa’s Lulo mine in Angola, which has already shown its value.”

Lucapa also plans to expand the Mothae mine, which has just resumed operations after being on care and maintenance since it went into lockdown at the end of March. The expansion should take approximately three to four months to complete, and will likely increase output by 60%, Wetherall confirmed.

Image: Rough diamonds from Mothae. (Lucapa Diamond Company)