Lucara Diamond has acquired Clara Diamond Solutions which uses the technology blockchain to trace diamonds as they move through the supply chain.
Clara Diamond Solutions is also a digital sales platform that applies algorithms to match rough diamond production to polished manufacturing demand on a stone by stone basis.
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Lucara believes that the platform should improve profit margins for both buyers and sellers.
The hope is to commercialise and scale up Clara Diamond Solutions’ platform in the coming months.
Lucara acquired Clara Diamond solutions for 13.1m shares which equates to approximately $29m.
William Lamb, Lucara’s CEO, stepped down from his position and from the board of directors. The founder and current director of the company Eira Thomas will be assuming the role of CEO.
What was said:
Chairman of Lucara Diamonds Lukas Lundin said:
We believe that Clara will not only modernise the entire diamond sales process but unlock additional value for all participants across the diamond market.
Given Eira’s deep understanding of our business and her relationships across the diamond world, she is uniquely positioned to lead both Lucara’s operating business and this exciting new initiative.
William Lamb, Lucara’s outgoing-CEO, said:
I am proud to have served as Lucara’s CEO for almost a decade, during which time, Karowe was taken from feasibility through to a steady state, world class, operating diamond mine.
The recent acquisition of Clara marks an exciting milestone for the Company and is consistent with our approach of looking well beyond existing industry practice, adopting innovation and progressive development as a key pillar of the Company’s success.
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What this means:
Diamonds are one of the most expensive commodities in the world and crucial to their value is their certification.
Despite the UN approving an international certification scheme, the Kimberley Process, in 2003 to try to step the trade of conflict or blood diamonds, diamond fraud remains commonplace causing huge losses for the industry.
The Kimberley process means diamonds are sent in sealed containers that are accompanied by certificates that say they are conflict-free stones.
The most recent example was in April 2017 when ten men were arrested in New York, Las Vegas and Mumbai for defrauding certain wholesalers out of more than $9m in diamonds.
Thus diamond producers are looking for better methods to trace their products through the supply chain and blockchain has been viewed as a potential option.
Blockchain is a network and database technology which can be used to cross-reference certified diamonds against a digital ledger of ownership and origin of the stones.
The system requires the results to be validated by multiple different blocks or separate databases meaning the results exist on multiple computers at the same time and thus no-one would be able to tamper with the results.
Lucara diamonds is a leading diamond producer which sources its stones from its Karowe mine in Botswana.
Its headquarters are based in Vancouver, Canada.
Its full year revenues for 2017 were $220.8m or $847 per carat.
De Beers has revealed that it is working on a pilot blockchain platform.
This platform aims to create a more secure register of each transaction involving the diamond across the industry which can then built upon in the future.
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