Lucara Diamond Buys Digital Sales Platform
Diamond miner Lucara Diamond has acquired Clara Diamond Solutions for $29 million. Clara’s primary asset is a secure sales platform.
Diamond miner Lucara Diamond (TSX:LUC) has acquired Clara Diamond Solutions for $29 million, the company announced on Sunday (February 25).
Clara’s primary asset is a secure digital sales platform that aims to transform how rough diamonds are sold, providing large value for both diamond producers and manufacturers.
The company uses proprietary analytics and blockchain technologies to modernize the existing diamond supply chain and drive efficiencies in the process of mine to finger.
Additionally, Clara’s technology eliminates dependency on a fixed sales cycle, reducing unwanted carrying costs for stakeholders and improving margins for both buyers and sellers.
Lucara intends to commercialize the platform in the coming months using a selection of diamonds from its Karowe mine. Testing on the platform has demonstrated the potential to reveal more than 20 percent of value throughout the diamond pipeline to the benefit of all participants.
While Lucara will use the newly acquired blockchain and platform to sell some of its own diamonds, plans are in place to expand the platform to third-party producers.
Lucara is not the first diamond company to adopt blockchain technology. Larger companies like De Beers are also looking to incorporate the technology into their day-to-day dealings. Like Lucara, De Beers plans to make its blockchain technology available to others.
Bruce Cleaver, De Beers CEO, stated, “[i]t’s a huge public ledger as immutable as anything invented. It’s a much more un-hackable system than anything on a single server.”
Of course, diamonds aren’t the only resource that could be put onto the blockchain. The technology can also be used for other stones and minerals, which could significantly cut down on illegal sales.
More importantly, experts believe the blockchain system could help cut down on the well-known human rights abuses which have plagued the industry for decades.
After the announcement, shares of Lucara Diamond climbed 16.9 percent to close in Toronto at C$2.39 on Monday (February 26).
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.