Thursday, June 4, 2020

Lucara in no hurry to sell its largest gem by far

BY KABELO SEITSHIRO

The recently discovered 1 758 carat diamond by Lucara Diamond Company Botswana from its Karowe ÔÇô the largest by far ÔÇô is still on display as the company analysis the special rough stone before it can be put up for sale..

The stone is not only the largest diamond in recorded history recovered in Botswana but the largest diamond to be mined at Karowe to date. The unbroken 1,758 carat stone was recovered through Lucara’s state of the art XRT circuit.

Lucara Botswana managing director Naseem Lahri told the media recently that the company wants to take its time to ensure that the best decision is made for Lucara Botswana and Botswana. She said the 1 758 carat precious stone is a complex one.

“All our diamonds go through the Government Diamond Valuators before sale on any platform,” said Lahri.

Quizzed on the future options of selling the diamond, she said Lucara Botswana sells on two platforms which are Traditional Tender Platform and also the Clara Diamond Solutions.  She added that Lucara Botswana sells its diamonds through an online tendering process and that this includes the regular goods and the special stones. She explained that a reserve price is put against each parcel and single stone.

“Registered clients are invited to participate in the tender and inspect the diamonds offered for sale in Gaborone. The clients submit their bids through a secured and encrypted connection,” said Lahri.

She further stated that once the submission period has ended, any bid shall stand as an offer to buy the lot in respect of which the bid is made. Lahri said the tender close and acceptance of bids is done through a regulated process which is monitored and regulated by an independent bailiff.

Regarding the Clara Diamond Solutions, she said it is an online sales platform that incorporates blockchain and that it is owned by Lucara Diamond. She is of the view that It is the first platform of this kind in the world which has provided Lucara Botswana the opportunity to disrupt the existing supply chain, driving efficiencies and unlocking value

“Rough diamonds are sold stone by stone based on polished demand. Diamond provenance is assured,” said Lahri.

She observed that Lucara Botswana is the first diamond company to use the platform in the world to sell its rough diamonds adding that single stones between 1-15carats are sold on the platform.

Quizzed on the Lucara business model and also valuation processes, Lahri stated that all their diamonds go through the Government Diamond Valuators (GDV) before sale on any platform. She said Lucara Botswana also has its own team that values the stones.

She also stated that the reserve price is set using the Lucara Botswana teams valuation and added that the GDV valuation is used to validate the Lucara Botswana valuation. She said the final sale is determined by what the market (client) has placed through both platforms ensuring the maximum price achieved for the company.

Lahri revealed that Lucara pays the government 10 percent royalty on all sales achieved, adding that Lucara Botswana pays 22 percent ÔÇô 55 percent tax on its taxable income.

“This is how the government receives its dividend and tax money. This mechanism is unique to Lucara Botswana as it’s a private diamond company,” she said.

She stated that that to date the company has paid in excess of 22 percent in taxes enabling the government to receive taxes and dividends through this process.

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