Vancouver, British Columbia – Lucara Diamond Corp. is severing ties with manufacturer HB Antwerp less than a year into a decade-long relationship.
In a brief statement released Wednesday, the miner, 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 covenants” by HB.
Lucara declined to provide further details on its decision to terminate the contract, saying only that it would provide the market with more information on its divestment plans in the future.
HB Antwerp did not respond to a request for comment.
Lucara and HB Antwerp first linked up in early 2020, before the pandemic, when Lucara announced it would partner with Antwerp-based diamond manufacturer and fashion giant Louis Vuitton to cut the 1,758-carat “Sewelô” diamond and turn it into a jewellery collection.
In July of the same year, Lucara and HB Antwerp announced a “ground-breaking” partnership in which HB would purchase and manufacture all rough diamonds of 10.8 carats or more from Lucara’s Karowe mine for the remainder of 2020.
Under the terms of the agreement, the price paid was based on the expected polished result, less a fee and the cost of production. The deal provided Lucara with a steady source of cash flow at a time when global markets were disrupted by 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 distribution 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 Botswana government, which had planned to take a 24 per cent stake in the company.
Botswana President Mokgweetsi Masisi said in a press conference broadcast live on Facebook on Thursday that the country was reviewing the situation in light of the latest news. The break-up of Lucara-HB Antwerp is the second piece of negative news to emerge from the Antwerp diamond industry this week.
Earlier in the week, JCKOnline.com reported that the president of the Antwerp World Diamond Centre, David Gotlib, had resigned.
His resignation came after 16 major diamond companies with offices in Antwerp sent a letter to the AWDC board, Gotlib and CEO Ari Epstein expressing concerns about the organisation’s lack of transparency, accountability and inclusiveness.
In the letter, obtained by National Jeweler, the companies accuse the AWDC of not being transparent in its elections and of making “major policy decisions” without consulting them, even when they affect their businesses.
The letter alludes to the recent proposal by the Belgian government, backed by the AWDC, to impose additional restrictions on Russian diamonds entering Western markets at the behest of the G7, a plan known as the “EU proposal”.
According to the letter, the EU proposal was drafted without their knowledge. It states: “In light of the Russian supply challenge, we’ve now seen through leaked documents that the AWDC CEO has been developing and pursuing policy without consulting (at least openly) with key industry players.”
She concludes by calling on the AWDC to start communicating with diamond companies in Antwerp and involve them in decisions that affect their businesses.
“We need to be involved in relevant events that have anything to do with the Antwerp diamond industry. We need to be consulted before major structural or legislative steps are proposed… We do not want to be the last to be informed about issues that clearly affect us all,” it says.
Signatories to the letter 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.
