Home » Lucapa Diamond to Sell 70% Stake in Mothae Mine

Lucapa Diamond to Sell 70% Stake in Mothae Mine

Lucapa's Strategic Move Focuses on Core Assets and Portfolio Efficiency

by Ikeoluwa Ogungbangbe

The Australian-based diamond mining company Lucapa Diamond, which is traded on the ASX under the symbol LOM, plans to sell its 70% ownership in the Mothae diamond mine in Lesotho. This calculated action fits into the company’s larger plan to reduce the size of its holdings and focus on its core businesses in Australia and Africa.

The board of Lucapa recently stated in a statement that it is examining every option for the sale and is completing a data room to help prospective bidders with their due diligence. The move emphasizes the company’s aim to streamline processes and concentrate on areas in which it has a competitive edge.

Stuart Brown, the chairman of Lucapa, commented on the collaboration with the Lesotho government, which holds the remaining 30% stake in the mine. “The company’s collaboration with the Lesotho government on the Mothae diamond mine has been rewarding, and our management have worked exceptionally well to optimize the plant to recover large diamonds,” Brown stated. He also expressed optimism about finding a buyer, noting the mine’s established reputation and its ability to attract significant interest from industry insiders and beyond.

The Mothae mine is well known for producing large, high-value diamonds. It started commercial operations six years ago after being acquired by Lucapa in the beginning of 2017. It is the second-highest kimberlite diamond mine in the world in terms of price per carat. Its close proximity—just 5 kilometers away—to Gem Diamonds’ Letšeng mine, the world’s highest dollar-per-carat kimberlite diamond mine, contributes to its prestigious reputation.

The mine has significant reserves, with 180,000 carats of indicated resources and 960,000 carats of inferred resources, valued at an astounding $606 per carat, according to recent production estimates that Lucapa revealed in December 2023. These numbers demonstrate the mine’s significant economic potential. Lucapa recently revealed the finding of a 101-carat D-color Type IIa white diamond at Mothae, which increased the mine’s appeal.

Aside from its interests in Lesotho, Lucapa holds a 40% stake in the highly productive Lulo mine in Angola and is actively involved in exploration projects across Angola, Australia, and Botswana. These activities align with the company’s strategy to focus on high-potential mining operations and exploration opportunities.

The diamond industry has faced several challenges lately, including an oversupply that has led major producers to cut back on production and reduce prices. Additionally, the rise of lab-created diamonds has introduced new competition, impacting the market dynamics for natural diamonds.

You may also like

Leave a Comment

The African Miner is the vanguard of the mining industry, delivering world-class insight and news.

Latest Stories

© 2024 The African Miner. All Rights Reserved.