Lucara Diamond ends sales deal with trader HB Antwerp

Lucara Diamond

28/09/2023 11:46

By Brian Benza
       GABORONE, Sept 28 (Reuters) - Canada's Lucara Diamond
 LUC.TO  said on Thursday it had ended its gem sales agreement
with HB Trading BV, a unit of HB Antwerp, in a move that could
affect a deal between the Belgian trader and the government of
Botswana. 
    "Lucara exercised its right to terminate the agreement
following a material breach of financial commitments by HB," the
Toronto-listed miner said in a statement, without giving
details.
    HB was not immediately available to comment.
    The two parties first entered into a diamond sales agreement
in 2020, which was extended for 10 years in 2022. Under the
deal, HB would buy stones of 10 carat quality and above from the
Toronto-listed Lucara's Karowe Mine in central Botswana at
prices based on the estimated polished value of each diamond.
    In March, the government of Botswana, the world's No. 1
diamond producer by value, said it had agreed to buy a 24% stake
in HB Antwerp. As part of the deal, state-owned Okavango Diamond
Company would supply HB with an undisclosed quantity of rough
diamonds for five years.
    The government did not immediately respond to a request for
comment on whether that deal might be affected by Lucara's move.
    HB Antwerp has recently been rocked by the removal of
co-founder Oded Mansori from management following differences
over strategy. Mansori, who co-founded HB Antwerp in 2020 with
partners Shai de Toledo and Rafael Papismedov, said he was
taking them to court over his removal.
    Lucara, which expects rough diamond output between 395,000
carats and 425,000 carats and revenue up to $230 million this
year from Karowe, said it would continue to sell its stones
through its Clara diamond platform, traditional tenders and
"other value-added mechanisms".

 (Reporting by Brian Benza
Writing by Nelson Banya
Editing by Mark Potter)
 ((Nelson.Banya@thomsonreuters.com;))