Lucara Diamond Corp. has ended its rough-diamond sales agreement with HB, citing a “material breach of financial commitments” by the Belgian manufacturer as the reason for the split.
The miner exercised a right to terminate the offtake deal under the terms of the contract, it said Wednesday. Lucara will continue to sell its rough through other methods, including its traditional tenders as well as its Clara diamond-sales platform, which matches buyers with rough according to their specific requirements, it explained.
Lucara first reached a deal with HB in 2020 to sell the manufacturer all of its diamonds weighing 10.8 carats or more, for which it received the rough sale price as well as a portion of the polished proceeds. It renewed that contract for 10 years less than 12 months ago. The agreement boosted Lucara’s financial performance in 2021 and 2022, partly thanks to the “true-up” it received from HB once the polished was sold.
The termination of the Lucara deal comes on the heels of an internal dispute between HB cofounder and managing partner Oded Mansori and the company’s other partners earlier this month. The entities had contrasting views on the direction of the business, leading to Mansori’s exit and a pending legal case.
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Lucara plans to pursue different methods of selling its rough, it said.
“The Lucara production profile is unique in the diamond industry and the company will continue to look at innovative sales mechanisms to maximize the value of our rough diamonds,” said Lucara CEO William Lamb.
HB did not respond to a request for comment from Rapaport News by press time.
Main image: The 1,109 carat Lesedi La Rona rough diamond. (Lucara Diamond Corp.)
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