On Monday 31 March, Canadian company Lucara Diamond announced that it will now be responsible for implementing the underground extension project (UGP) at its Karowe diamond mine in Botswana. The decision follows the termination of the engineering, procurement and construction management contract originally awarded to Canadian mining services company JDS Energy & Mining Inc.
Until now, JDS Energy & Mining has played a central role in the development of the Karowe PMU. With this new strategic direction, the company will focus solely on certain technical aspects of the project, while Lucara Diamond will assume direct management of "all contracts and activities" associated with the development of the underground extension.
This direct takeover is designed to improve the efficiency and speed of the project, as William Lamb, CEO of Lucara Diamond, explained: "By taking direct control of the activities on site, we are positioning ourselves to respond more quickly to the needs and challenges of the project. This approach will enable us to progress the PMU more efficiently and accurately, delivering added value to our shareholders and stakeholders.
This refocusing comes at a time when the project has experienced successive delays. Initially scheduled for the second half of 2026, underground mining at the Karowe mine had already been pushed back to the first half of 2028. Lucara's aim is therefore to reduce these delays and ensure that work progresses more smoothly.
The UGP project, which is estimated to cost $683 million, is of vital importance to the future of the Karowe mine. Its completion is expected to extend the life of the site until 2040 and generate around $4 billion in additional revenue.
However, this initiative comes against a complex economic backdrop, marked by falling diamond prices in recent years. After falling by 18% in 2024, rough diamond prices will continue their downward trend in 2025, recording a further drop of 2% between January and mid-February, according to analyst Paul Zimnisky. This situation could affect the long-term profitability of the project if the market does not recover.
Lucara Diamond has not yet specified the measures she intends to put in place to accelerate the PMU's development and meet these economic challenges. Investors and stakeholders will therefore be closely monitoring the progress of this strategic transition and its impact on the company's performance.