Lucapa Diamond Company has entered a new cutting and polishing partnership with a high-end diamantaire to sell its diamonds from the Mothae kimberlite mine in Lesotho, Africa.
The company has been unable to market Mothae diamonds through its regular tender channel in Belgium due to coronavirus restrictions but is still experiencing a demand for Mothae products.
This demand has led to 3693 carats of Mothae diamonds being sold to the cutting and polishing partnership for $US2 million ($3.2 million) or $US505 per carat.
Under the cutting and polishing agreement, Mothae will receive the rough price upfront with additional margins generated from sale of the diamonds after procurement and manufacturing costs have been accounted for.
These additional margins will be shared equally between Mothae and the cutting and polishing partner.
“Despite the current macroeconomic uncertainty brought about by COVID-19 (coronavirus) hindering the marketing of diamond and prices generally, it was pleasing to still see demand for the higher-quality Mothae-type production,” Lucapa managing director Stephen Wetherall said.
“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.”