Lucara’s second-quarter results show early signs of diamond-market stabilisation, but higher-value stones are recovering faster while commercial categories remain under pressure.
GAZETTE REPORTER
The global natural diamond market is showing early signs of stabilisation, although recovery remains uneven across categories, according to Lucara Diamond Corp.’s second-quarter 2026 results.
Supply Tightens
Global natural diamond production is forecast at approximately 100 million carats in 2026, down from more than 150 million carats less than a decade ago. The decline reflects the depletion of legacy mines, limited new discoveries and the suspension or closure of several mines across the industry.
At the same time, lab-grown diamond wholesale and retail prices have continued to decline through 2026, in line with continued growth in production capacity.
Split Recovery
Lucara described the near-term natural diamond market as showing signs of a “K-shaped recovery”, with larger, rarer and higher-value diamonds recording stronger price performance.
The company said this segment is being supported by constrained supply and resilient demand, while smaller commercial categories are recovering more slowly and remain under pricing pressure.
“Encouragingly, positive price movement is becoming evident across rough and polished markets,” Lucara said, suggesting that conditions are beginning to stabilise after a prolonged downturn.
Macroeconomic uncertainty and competition from lab-grown diamonds remain headwinds, particularly in price-sensitive categories. However, tightening natural diamond supply, improving sentiment and emerging price momentum point to a more positive outlook for the remainder of 2026.
Karowe Sales
Diamonds from Lucara’s Karowe mine are sold through three channels: a diamond sales agreement with HB Trading BV, quarterly tenders and the Clara Diamond Solutions sales platform.
For the three months ended June 30, 2026, revenue from HB stood at $33.9 million, compared with $34 million in the same period last year. HB accounted for 83 percent of total revenue recognised during the quarter, up from 78 percent in the second quarter of 2025.
Lucara said HB revenue includes “top-up” and “top-down” payments, made to or from the company when the final polished diamond sales price differs from the estimated initial polished value. The time required to fully monetise a stone through this process can introduce quarter-to-quarter variability in HB revenue.
Tender sales totalled $5.4 million in the quarter, down from $7.8 million in Q2 2025, while Clara sales declined to $1.7 million from $1.9 million.
Average prices per carat fell across both channels, with tender prices declining 5 percent and Clara prices falling 17 percent. Lucara attributed the pressure to continued weakness in mid-range and lower-grade stones and cautious consumer sentiment.
Underground Spend
Lucara expects capital costs for its underground expansion project to reach up to $110 million in 2026.
Spending will focus predominantly on shaft equipping and advancing lateral development. Surface works will include the removal of stage and ropes, headgear changeover and installation of the main ventilation fan.
Sustaining capital is expected to reach up to $11.5 million, focused on replacing and refurbishing key asset components and advancing tailings.