GABORONE, Sept 18 (Reuters) - The sale of diamonds

through tenders and auctions is opaque and inefficient and

should be revamped for producers to earn more and to survive

the current price slump, a leading gem trader said on Thursday.

Oded Mansori, co-founder and managing partner of Belgian gem

trader HB Antwerp, said the impact on producers could be reduced

by doing away with inefficiencies in the industry.

The diamond market is currently going through a prolonged

downturn with demand hurt by global economic uncertainty and the

rising popularity of lab-grown stones.

Producer countries such as Botswana have been hard hit by

lower revenues, while miners such Burgundy and Lesotho's biggest

diamond mine Letseng have had to lay off workers.

"For years, miners relied on tenders and auctions, systems

that look efficient on paper but in practice resemble a casino,"

Mansori said in a statement, as the industry battles a crisis

considered to be its deepest in history.

"Rough stones are pushed into opaque markets where value is

anyone's guess. When global demand softens, as it has in cycles

over the last decade, producers are left exposed. Workers pay

the price, while shareholders watch assets decline," he added.

Rough diamonds are typically sold through a competitive

bidding system where buyers place confidential bids on

individual stones or parcels.

Mansori, whose company operates a profit-sharing model with

miner Lucara Diamond Corp ( LUCRF ), says producers' revenues

should be tied to the eventual polished value of its stones

"rather than gambling on rough sales in opaque auctions".

Under its partnership with Lucara, HB Antwerp buys stones of

10.8 carat quality and above from the Toronto-listed company's

Karowe Mine in central Botswana at prices based on the estimated

polished value of each diamond.

HB Antwerp accounted for 72% of Lucara's $74 million diamond

revenue in the six months to June 30, up from 65% the year

before.

The trader says producers can earn up to 40% more revenue if

they sell through this model.