Lucapa Diamond Company has entered voluntary administration, with KordaMentha Restructuring appointed to manage the process. The appointment covers Lucapa and its subsidiaries, including Brooking Diamonds, Heartland Diamonds, and Australian Natural Diamonds.
Financial Position and Trading Suspension
The company cited soft diamond prices and operational disruptions as key factors behind its financial difficulties. For the 2024 financial year, Lucapa reported a net loss of $1.5 million and a 31% decline in revenue to $54.5 million. While average per-carat prices rose briefly in the first quarter, this did not offset wider financial pressures.
Lucapa raised A$2.67 million through share placements and reduced its head office staffing to lower costs. Cash and receivables declined to A$2 million by quarter-end, representing a 41% year-on-year fall.
A trading halt was requested on 14 May, with the Australian Securities Exchange suspending Lucapa’s shares on 16 May. The ASX cited the company’s financial position as inadequate to support continued quotation.
Asset Portfolio and Operational Developments
Lucapa holds a 51% interest in the Lulo alluvial diamond mine in Angola, having increased its stake from 40% earlier this year. The mine is known for its high-value diamond output. Operations at Lulo were interrupted during the first quarter by an 18-day blockade linked to local community demands concerning social programmes. The disruption was later resolved.
In Australia, Lucapa holds the Merlin Diamond Project in the Northern Territory, for which it had sought $16 million in investment. It also holds exploration interests through the Brooking Diamonds project in Western Australia.
In 2023, Lucapa sold its 70% stake in the Mothae mine in Lesotho to a local contractor for a nominal amount. The sale took place during a period of weak global diamond market conditions.
The administration reflects broader financial challenges facing mid-tier diamond producers during a period of sustained market pressure. Jewellers working with suppliers linked to mines such as Lulo or Merlin may wish to monitor the situation for potential changes in ownership or supply arrangements.
