Sourcing

Lucara Severs Ties With HB Antwerp

SourcingSep 29, 2023

Lucara Severs Ties With HB Antwerp

The two companies initially partnered during the pandemic and had just signed a 10-year sales agreement in November 2022.

692-carat rough diamond from the Karowe Mine
A 692-carat rough diamond Lucara Diamond Corp. mined earlier this year at its Karowe mine in Botswana. Lucara had a 10-year agreement to sell all its “specials” (diamonds 10.8 carats and larger) to HB Antwerp for manufacturing but announced this week that it is terminating the agreement.
Vancouver, British Columbia—Lucara Diamond Corp. is severing ties with manufacturer HB Antwerp less than a year into the companies’ decade-long deal.

In a short statement released Wednesday, the mining company, which underwent a change in leadership last month, said it was exercising its right to terminate its agreement with HB Trading BV due to a “material breach of financial commitments” by HB.

Lucara declined to provide additional details on its decision to terminate the contract, stating only that it will provide the market with more information on its sales plans in the future.

HB Antwerp did not respond to request for comment.

Lucara and HB Antwerp first linked up in early 2020, pre-pandemic, when Lucara announced it would partner with the Antwerp-based diamond manufacturer and fashion giant Louis Vuitton to cut the 1,758-carat “Sewelô” diamond and turn it into a jewelry collection.

In July of that year, Lucara and HB Antwerp announced a “groundbreaking” partnership in which HB would purchase and manufacture all the 10.8-carat or larger rough coming out of Lucara’s Karowe mine for the rest of 2020. 

 Related stories will be right here … 

Under the agreement, the price paid was based on the expected polished outcome, minus a fee and the cost of manufacturing. The deal gave Lucara a consistent source of cash flow at a time when markets worldwide were at a standstill due to COVID-19.

Lucara announced a 24-month extension to the partnership in April 2021 and in November 2022, the two entered into a 10-year sales agreement.   

For HB Antwerp, the end of the partnership follows a messy, ongoing divorce from one of its three co-founders, Oded Mansouri, and calls into question its future with the Government of Botswana, which planned to take a 24 percent stake in the company.

Botswana President Mokgweetsi Masisi said in a press conference broadcast live on Facebook Thursday the country was reassessing the situation in light of the latest news. 

He also noted the government’s arrangement with HB Antwerp is an “agreement in principle” only, not a signed, final deal. 

The Lucara-HB Antwerp break-up is the second bit of negative news to emerge from the Antwerp diamond industry this week.

Earlier in the week, JCKOnline.com reported that Antwerp World Diamond Centre President David Gotlib had resigned.

His resignation comes after 16 major diamond companies with offices in Antwerp sent a letter to address to the AWDC board, Gotlib and CEO Ari Epstein expressing concerns about the organization’s lack of transparency, accountability, and inclusivity.

In the letter, which National Jeweler obtained, the companies accuse AWDC of not being transparent when it comes to elections and crafting “major policies” without consulting any of them, even when it impacts their businesses.

The letter alludes to the recent proposal the Belgian government, which is backed by the AWDC, put forth regarding additional restrictions on Russian diamonds that are about to hit Western markets at the behest of the G7, a plan known as the “EU Proposal.” 

According to the letter, the EU Proposal was formulated without their knowledge. It states: “In light of the Russian supply challenge, we’ve now seen through leaked documents that the AWDC CEO has crafted and pursued policies without consulting any key industry players (openly at least).”

It concludes by calling upon AWDC to start communicating with diamond companies in Antwerp and including them in decisions that are germane to their businesses. 

“We need involvement in relevant events that have anything to do with the Antwerp diamond industry. We need to be consulted before major structural or legislative moves are proposed … We do not want to be the last to find out about issues that clearly affect us all,” it states. 

The letter’s signatories were: AC Diam, Arjav Diamonds, Dharam Diam, Diacore, Dianco, Gemasia, IGC, Kiran Exports, Komal Gems, MID, Mishal, Pinchasi Diamonds, Rosy Blue, Samir Gems, Swintudiam, and Taché Diamonds.

AWDC declined to comment on Gotlib’s resignation or the letter. 

Michelle Graffis the editor-in-chief at National Jeweler, directing the publication’s coverage both online and in print.

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