Lucara Diamond's Karowe mine in Botswana has reported a robust quarter, with a notable uptick in diamond sales compared to the same period last year and a 2% reduction in operating costs. While the revenue for the first three months of 2024 dipped slightly from the previous year, CEO William Lamb remains optimistic given the prevailing market conditions, which have seen a decline in rough diamond prices. This positive outcome is credited to a strategic combination of production timing and the discovery of significant large diamonds throughout the year.
The year commenced with notable finds, including a 166-carat Type IIa diamond, followed by a 320-carat top light brown gem quality stone and a 111-carat one. Lucara also secured a new sales agreement with HB Antwerp in February, covering all qualifying diamonds larger than 10.8 carats found at Karowe for the next decade. Progress on the underground expansion project at the mine is on track, with production expected to commence in early 2028.
Despite a relatively stable diamond market in the first quarter, Lucara notes cautious sentiment stemming from broader macroeconomic factors such as high inflation and interest rates, impacting consumer demand in certain regions. The rise in popularity and accessibility of lab-grown diamonds is cited as a key challenge facing the market, prompting major producers like de Beers and Alrosa to reduce output to balance inventory levels. However, Lucara emphasizes that the enduring supply and demand dynamics favour mined diamonds in the long term, given the continued constraints on new mine supply.
