Botswana: Lucara directly manages the expansion of the Karowe diamond mine.

Canadian mining company Lucara Diamond Corp. has announced a major strategic shift in developing the Karowe diamond mine’s underground expansion project (UGP) in Botswana. In a statement published on Monday, March 31, the company confirmed termination of its engineering, procurement and construction management contract with JDS Energy & Mining Inc., previously responsible for managing the project.

This decision marks a turning point in managing construction, now led directly by Lucara, which assumes control over all contracts and activities associated with UGP development. JDS will continue contributing to certain specific technical aspects, but its role is substantially reduced.

“By taking direct control of on-site activities, we are positioning ourselves to respond more quickly to the project’s needs and challenges. This approach will enable us to advance the UGP with greater efficiency and precision, delivering added value to our shareholders and stakeholders,” said Lucara President and Chief Executive William Lamb.

The UGP project’s pace of execution remains a continuing concern for Lucara. Initially scheduled to begin underground operations in the second half of 2026, start-up has been postponed to 2028 because of various technical and logistical delays. With this new approach, the company hopes to restore construction momentum, without yet disclosing a detailed strategy for accelerating work.

With an estimated budget of US$683 million, the expansion project aims to extend the Karowe mine’s life to 2040 while eventually generating approximately $4 billion in additional revenue for the company. It represents a major growth driver for Lucara, owner of one of the world’s most prolific sources of large diamonds.

However, this initiative comes amid economic uncertainty for the diamond industry. The global market remains under pressure from continuously declining prices. After falling 18% in 2024, rough diamond prices dropped a further 2% between January and mid-February 2025, according to industry expert Paul Zimnisky. If prolonged, these unfavorable conditions could weigh on UGP profitability.

Despite these headwinds, Lucara appears determined to regain control of its mining future, relying on direct governance to ensure this strategic project’s success.