Diamond firm Lucara acquires digital platform Clara to add blockchain capability

Canadian diamond exploration and mining company Lucara Diamond has acquired Clara Diamond Solutions, a digital platform aimed at transforming how rough precious rocks are sold, for $29 million (Rs 188 crore).

Clara’s main asset is a program that applies algorithms to match rough diamond production with polished manufacturing demand on a stone by stone basis. It also uses blockchain, the technology behind digital currency bitcoin, to allow buyers source rough diamonds tailored to specific polished gems demand, resulting in improved margins for both buyers and sellers.

Lucara will use its digital platform to transform the process of how rough diamonds are sold in the market, it said in a statement.

"Clara uses proprietary analytics together with cloud and blockchain technologies to modernise the existing diamond supply chain, driving efficiencies and ensuring diamond provenance from mine to finger," it said.

Lucara intends to commercialise the Clara platform using a selection of the diamond production from the company’s Karowe Diamond Mine and later expand to accommodate diamond uptake from a variety of sources across the supply chain, the company said.

"Testing on the platform has demonstrated the potential to unlock greater than 20% of value throughout the diamond pipeline. Clara’s revenue model will be based on capturing a portion of this incremental value," it said.

Lucara has also replaced William Lamb with Eira Thomas, who is one of the firm’s co-founders, as CEO.

“Consumers want to know that their diamonds are produced from mines that are good stewards of the land, that have social policies, that are progressive, that we think about our contributions to our communities,” Thomas was quoted as saying by The Financial Times.

Blockchain systems are seeing increased use in supply chain management as they can streamline the process by permanently recording each transaction on the blockchain, significantly increasing transparency.

With the move towards blockchain tech, Lucara joins the ranks of larger peers such as De Beers and Russia’s Alrosa PJSC, according to a Bloomberg report. Last month De Beers said it was testing a virtual ledger to ensure consumers that its gems are genuine.

"It is a huge public ledger as immutable as anything invented. It is a much more un-hackable system than anything on a single server," De Beers’ CEO Bruce Cleaver was quoted as saying by The Bitcoinist.