Sarine Technologies Ltd announced it has entered into an agreement with Clara Diamond Solutions Corporation, a subsidiary of Lucara Diamond Corp. to roll out a digital rough diamond spot sales platform.
The rough diamond industry handles some $14 billion worth of stones annually. An estimated 90 percent of diamonds are sold in "boxes", typically to pre-approved major polishers, who may or may not also be major retailers.
Buyers or Sightholders are allocated these boxes of rough diamonds and sell the stones they do not want into the secondary market by way of brokers. Sometimes the Sightholders get many stones that closely match their actual current needs, but sometimes just a few and need to buy more in the secondary market themselves.
Ultimately what Clara is proposing is that buyers don't buy boxes of stones, but rather buy individual stones that all closely match what they need most. The system proposes to sell diamonds directly to jewellery manufacturers via a digital platform backed by secure blockchain technology developed by Clara.
According to a Sarine release, Clara’s platform will enable recording of the mine origin of the rough diamond before it is sold. Sarine's Galaxy inclusion mapping technology and its Advisor optimal rough planning will then be applied to the rough stone to generate possible cutting and polishing solutions as per polished diamond manufacturers' and retail customers' pre-defined orders. Optimisation of the sorting process in this manner will match available rough material with manufacturers' and retailers' current market demand, allowing them to search for the exact stone(s) they need at the price they want. Initially Lucara will sell some of its own diamonds on Clara and may expand to allow other producers' rough stones to be sold via the platform.
Sarine will be remunerated on a per-stone, per-carat basis, both for its Galaxy services, as well as for its Advisor — new cloud-technology enhanced planning services being used for the first time on the Clara platform. This, Sarine says, will create a new source of recurring revenue from the upstream of the diamond value chain.
The use of blockchain, the distributed ledger technology, will be utilised to keep information confidential and secure and improve transparency of the provenance chain. That is especially key for millennial consumers to reassure them about where their diamonds came from.
Lucara CEO Eira Thomas stated, “Clara is delighted to be partnering with Sarine, the industry leader in diamond scanning and planning technology, already in widespread use throughout the industry. Sarine’s Galaxy and Advisor technologies will integrate seamlessly with Clara’s digital sales platform to facilitate rough diamond sales on a stone by stone basis, based on a customers’ specific requirements and needs, aligning rough diamond production to polished demand and unlocking significant value throughout the diamond pipeline.”
Sarine CEO David Block commented, "We are excited to have the opportunity to contribute to this initiative, as it broadens our addressable market into the upstream mining and producing segment of the diamond industry value chain. It is also the first opportunity to extend our pay-per-services paradigm to the actual planning of rough diamonds. We believe that we will further cooperate with Lucara on their provenance blockchain initiative, as our Diamond Journey is a natural fit.”