ALROSA Plans 2015 Sales +5% to 40M Carats

Diamond Sales Exceed $5B in 2014

Jan 29, 2015 4:02 AM By Ronen Shnidman

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RAPAPORT... ALROSA is planning to ramp up its diamond production by 5 percent to 38 million carats in 2015. The Russia-based mining company also forecast that its sales volume will grow 1 percent to 40 million carats this year. The miner stated in an operational overview published Thursday that it expects to sell 2 million carats from existing inventory in the coming year.

The company did not issue any price guidance for the year ahead. However, management said they expect moderate growth in the diamond market based on positive macroeconomic indicators in major diamond-jewelry-consuming countries.

ALROSA reported that diamond production fell 2 percent year on year to 36.21 million carats in 2014, which slightly exceeded the company’s initial guidance by 210,000 carats. The company sold 27.74 million carats of gem-quality rough during 2014 at an average price of $171 per carat and 11.83 million carats of industrial-quality rough at an average price of $12 per carat. ALROSA noted that its rough diamond prices rose 7 percent on average during the year.

The company generated more than $4.9 billion in rough diamond sales out of total diamond revenue of $5.05 billion.

During the fourth quarter, ALROSA’s diamond production rose 8 percent year on year to 10.56 million carats. Production was driven by the completion of maintenance at treatment plants for the International, Aikhal and Mir underground mines.

Fourth-quarter production was also boosted ALROSA’s recently commissioned Udachny underground mine and the new Karpinskogo mine. The Udachny underground mine yielded 114,000 carats during the quarter, while Karpinskogo produced 266,000 carats. Rough diamond sales were flat at 10.56 million carats. The company increased its sales of gem-quality rough by 2 percent to 6.85 million carats. In contrast, its sales of industrial-quality diamonds declined 4 percent to 3.94 million carats.

Rough prices for gem-quality rough declined 16 percent to an average of $161 per carat. Meanwhile, the prices for industrial-quality rough rose 57 percent to an average of $11 per carat.

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