How the discovery of Africa’s 2nd largest diamond has transformed its owner - CNBC Africa

How the discovery of Africa’s 2nd largest diamond has transformed its owner

Special Report

by Tendai Dube 0

How the discovery of Africa’s 2nd largest diamond has transformed its owner. Photo: Lucara

It might have taken over a century, but the second biggest diamond of gem quality has been discovered – and once again it’s from Africa.

The 1,111 carat gem sized at 65mm x 56mm x 40mm – roughly the size of a tennis ball, is the largest to be recovered in the diamond-rich economy of Botswana.

The glistening type-IIa beauty was discovered by relatively small mining company, Lucara Diamond in the Karowe mine in Botswana - about north of the country capital Gaborone.

The last diamond discovered of a similar magnitude is the Cullinan diamond, which was found in South Africa in 1905, a 3, 106 carat diamond, of which the biggest pieces sit on the British Crown.

According to a spokesperson for the miner, the stone is currently undergoing cleaning and will be reassessed once this process is complete.

“It is difficult to place a price on such a special diamond. Lucara expect the price to be significant and may be sought after by someone seeking to create something special from a high quality historic diamond,” said Jamie Hilder.

He adds: “The recent strength in sales prices for 100+ carat white diamonds is a positive indicator for the potential sales price for this diamond.”

Lucara 2

The announcement received global coverage said the representative, with over 1,000 articles and 47,000 twitter mentions.

Following the announcement in November 2015 Lucara’s stock has jumped over 30 per cent on both the Toronto Stock Exchange (TSX) and OMX exchanges.

The diamond sector had its toughest year in 2015 since the global financial crisis as it deals with a surplus in production and too little demand.

However in Africa’s diamond capital of Botswana, Honourable Minister, Onkokame Kitso Mokaila from the Ministry of Minerals, Energy and Water resources in the country is not concerned with the low prices.

“Well obviously everything has its time and it’s moment, there will be times when the diamond price will go up, there will be time when it will soften – it is just a question of reading the market and responding accordingly to ensure that you stay in business,” said the minister.

While the diamond market remains volatile, Lucara claims to continue “to represent best-in-class exposure to the diamond mining industry”.

“Lucara received praise as the first diamond company to utilise XRT (X-Ray Technology) as its main processing technology which aided the recovery of the stone,” Hilder added.

"This historic diamond recovery puts Lucara amongst a select number of truly exceptional diamond producers. The significance of the recovery of a gem quality stone larger than 1,000 carats, the largest for more than a century and the continued recovery of high quality stones from the south lobe cannot be overstated,” said William Lamb, President and CEO of Lucara in a statement.

Lucara 3

And with the same difficulty of drawing blood from a stone, the company has revealed very little about plans for the massive find.

“With such a special diamond Lucara will be considering all possible sales avenues. The diamond may be sold individually and not part of Lucara’s EST or regular tenders,” said the spokesperson.

In a stroke of unmatched luck, the company also dug up an 813-carat and 374-carat diamond in the same week of the historic find.

In April last year, Lucara found a 341.9 carat Type-IIa diamond and sold it for nearly 20.6 million dollars, based on that,  this 1, 111 carat find would have to sell for way above 60 million dollars.