The sensational message reaches Eira Thomas late. The company boss is spending Easter 2019 far away from the world, in a dead zone; Only when she drives to the neighboring town, checks her e-mails and logs into the Internet, does she learn that workers in a mine belonging to the Canadian Lucara Group in Botswana have discovered a diamond the size of a baseball. 1758 carats - the largest find in more than a century. And she, of all people, the co-founder and president of the group, is one of the last to get the sensation - in the form of "dozens of messages" on her mobile phone, says Eira Thomas.
To be behind the times - that is not at all typical for Eira Thomas. She entered the diamond business to turn the industry on its head, to automate and digitize the business. Thomas brings traditionalists against her - she says herself that it is not easy "to break with such long traditions". No matter. Your courage has already paid off. And should really pay off after the corona crisis.
This article comes from the "WirtschaftsWoche".
The tech-savvy Thomas has already made a breakthrough in mining the valuable stones. In 2015, Lucara commissioned the first machines with the X-ray transmission technology developed in Germany - two weeks later, two unusually large diamonds were found. They were so valuable that the cost of the machine ($ 35 million) was worth it.
One and a half years ago, Thomas started the digital sales platform Clara Diamonds. It's a revolution for the industry. So far, the business has been based on personal exchange: mining companies and producers hold sales days at the places of origin of the diamonds, selected interested parties fly in by invitation. Trade has "been done in the same way for more than 100 years," says Thomas.
Exact inner workings
Clara Diamonds changes everything. Sensors scan the surface of the diamond and explore its inner workings - and algorithms link sellers and buyers who have roughly the same interests. So far the company's turnover is manageable. Since the end of 2018, diamonds worth a good twelve million dollars have been sold on the platform. It was $ 3 million in the first quarter of 2020.
On the other hand, Clara has made sure that the sales figures do not drop due to the corona. The rating agency Moody's anticipates that sales of rough diamonds will collapse by 30 to 40 percent this year due to the pandemic. In the first three months of the year, Lucara lost $ 3.2 million. The company has postponed investments into the fourth quarter. It is "well positioned to manage this storm," says Thomas, who studied geology and discovered her first diamonds in Canada in the 1990s. Today the country is the third largest producer in the world. And after the former monopoly De Beers from London and the Russian market leader Alrosa, Lucara is one of the top suppliers worldwide.
stone on stone
But can Lucara gain a permanent competitive advantage with his strategy? One thing is certain: the crisis shows that many diamond companies have some catching up to do. The trading platform "Get Diamonds", initiated by the world association of diamond exchanges, started operations a few weeks ago, and De Beers revised its online offer. The company, like all the competition, is looking for a way to reduce inventory. Exchanges and shops were closed for weeks. Stones worth around 3.5 billion euros have now been stored in the vaults.
Corona also affects the countless smaller players who cavort on the market. In the Belgian port city of Antwerp alone, which has been the center of the diamond trade since the 16th century, around 1,600 companies have specialized in the business of precious stones. Around 80 percent of all rough diamonds mined worldwide end up here sooner or later.
For example with Stéphane Fischler. The partner of Fischler Diamonds, a diamond dealer founded in 1953, doesn't believe the pandemic will change the business "overnight". Fischler, ex-president of the World Diamonds Council, however, expects that companies will attract more critical parts of the production cycle: "I believe that 90 percent of the production process can be automated within a decade."