Botswana is believed to have decided to join the war between Lucara Diamonds and HP Antwerp on the side of the Belgian investor.
President Mokgweetsi Masisi announced earlier this year that Botswana would take a 24% share in HB Antwerp, in a deal that called for HB to purchase large stones from the government-owned Okavango Diamond Company.
Following the subsequent collapse of the relationship between Lucara Diamonds and HP Antwerp, there was speculation that Botswana may pull out of the deal. After initially appearing to move in that direction, President Masisi during his State of the Nation Adress announced that, “due process of detailed, legal and commercial due diligence is now ongoing to finalize the deal”, with HP Antwerp.
The fall out between HP Antwerp and Lucara shortly after William Lamb took over as Lucara CEO sparked a lot of conspiracy theories that it was all part of a plan to frustrate Botswana’s relationship with HP Antwerp.
The subsequent resignations of some high level managers at Lucara who were allegedly opposed to the decision to terminate HP Antwerp’s business deal only added to the air of intrigue surrounding the issue.
Under the now-canceled 10-year seal, Lucara sold HB its Karowe mine’s entire production of “specials”—diamonds over 10.8 carats—and received a percentage of the final polished sale price. Lucara’s former management believed to be rooting for the business deal with HP Antwerp say this method yielded better results than selling via auction, as it increased the miner’s alignment with its downstream partner.
Lamb was last week quoted by JCK saying the Botswana government prefers that model and wants to “continue to move forward with” it—even if Lucara has to find a new partner.
“We are not going to be selling our 10.8-carat stones through the tender process as of today,” Lamb said, according to a SeekingAlpha transcript. “We are still waiting for approval from the government of the Republic of Botswana for an official approval to be able to sell our 10.8 carats either through tender or through some other mechanism. If we do get approval, then we will message to the market how those [diamonds over] 10.8 carats are going to be sold, whether it’s going to be another agreement similar to HB. That is what we are busy working on at the moment.”