Lucara Diamond Corp has bought Clara Diamond Solutions, a blockchain-based diamond tracking, and sales platform. With this purchase, Lucara, the Canadian diamond exploration and mining company has become the latest player in the industry to adopt blockchain technology. This is part of a growing trend that seeks to modernize the industry as well introduce a great deal of transparency to a historically opaque market.
The Vancouver-based diamond firm now joins the ranks of competitors like De Beers and Alrosa PJSC as diamond companies that have adopted blockchain technology as part of the operations. Lucara operates a Diamond mine in the African country of Botswana. In 2016, the company discovered a 1,109-carat stone which is the biggest diamond found in more than a century.
Details of the Deal
Lucara has agreed to pay approximately $29 million worth of stock to purchase Clara Diamond Solutions. This figure amounts to about 13.1 million Clara shares. The purchase enables Lucara to make use of the full spectrum of the services offered by Clara as far as the diamond industry is concerned. Clara provides blockchain-powered solutions for the diamond industry. The company also operates a platform that offers a marketplace for rough diamonds which manufacturers can buy for specific end purposes. In summary, Clara is all about creating a framework that ensures full “diamond provenance from mine to finger.”
Commenting on the acquisition, Lukas Lundin, the chairman of Lucara said that the purchase of Clara not only helps to modernize the diamond supply chain but also provides greater value for participants in the market. He also went to add that there are almost limitless potential benefits to be gained from incorporating the Clara platform within the framework of the overall Lucara diamond value chain. The news of the acquisition of Clara comes in the wake of the exit of William Lamb, the CEO of Lucara. William Lamb steps down after a decade at the helm of affairs, and he will be replaced by co-founder, Eira Thomas.
Growing Blockchain Adoption in the Diamond Industry
In recent years, blockchains have begun to see a lot of adoption in the management of global supply chains. IBM and Maersk have used blockchains to good effect to develop functioning enterprise supply chain management solutions. Many of these solutions focus on leveraging the power of the blockchain to simplify and streamline the process of recording transactions on the overall supply chain thus improving its transparency. It appears now that the diamond industry is also looking at implementing blockchains to offer a robust supply chain management framework for this same reason.
The diamond supply chain has traditionally been shrouded in layers of secrecy. De Beers, one of the largest diamond exploration companies in the world launched its pilot digital ledger that is designed to provide quality assurance for stones. The platform also helps to assure buyers that they aren’t buying conflict diamonds. Lucara plans to use the recently acquired Clara platform to sell some of its diamond output before opening the platform to third-party users.