Lucara leaves door open to another auction for whopper diamond

TORONTO – Lucara Diamonds, which failed to sell the biggest diamond found in more than a century through a public auction, may go under the hammer again.

“We’re not discounting going back to the auction process in some form in the future,” William Lamb, CEO of the Vancouver-based miner, told Bloomberg TV Canada in an interview Friday.

Lucara unearthed the 1 109-ct Lesedi La Rona diamond from its Karowe mine in Botswana. Bucking convention of selling the diamond only to professional buyers and insiders, the company took the gem –  about the size of a tennis ball – on a roadshow through Dubai, Hong Kong and Singapore before trying to sell it at an auction in London in June. Bidding never reached the company’s reserve, or minimum, price and it remained unsold.

“I hate the word fail,” Lamb said. “What we attempted to do was to tap into a market which nobody ever attempted to do before.”

Lucara wanted to see if there was “an alternative source of money” instead of the typical diamond buyer who values rough stones only for the kind of polished gem – or gems – it could produce, he said.

'BIGGEST PROBLEM'

“Was there an investor class that would acquire the stone in its rough form as a collector’s item?” Lamb said in the interview. “That’s the biggest problem for a rough diamond -- most people only value it for its intrinsic value, what you can polish out of it, what you can sell the polished one for. We were hoping that there would be an investor who would want to own it for its historical significance.”

It turns out the industry wasn’t too keen on the innovation. The company learned “quite early on in the process that they hate the auction,” he said.

Lamb remains undaunted. “The lesson is learned but that doesn’t necessarily mean we won’t go back” to the auction block, he said, pointing out that the global exposure has helped the company.

The Lesedi, or “our light” in the Tswana language spoken in Botswana, was mined within two days of the 813-ct  Constellation diamond. Lucara sold the latter for $63-million in May.

MINIMISING DAMAGE
Lamb also said the company has adopted new processes at its plant to minimise the likelihood of damaging any other huge stones it unearths and will be able to recover up to 3 000 ct stones. The mining industry loses tens of millions of dollars each year through breakages, he said.

The world’s biggest and rarest diamonds had proven more resilient than smaller rough stones – what mined gems are called before they’re cut and polished. Prices for rough diamonds slumped 18% last year, the most since the financial crisis in 2008, amid lower demand and an industry-wide credit crunch.