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Lukoil 9-Month Diamond Sales Top $120M
Dec 1, 2015 4:21 AM
By Rapaport News
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RAPAPORT... Lukoil, Russia’s largest oil producer, said diamond sales totaled $122 million in the first nine months of 2015, its first full year of operating the Grib mine. Third quarter sales amounted to $41 million, according to the company’s earnings report published on Monday.
Sales in the comparable third quarter of 2014 were “relatively insignificant” since they were only launched in September 2014, Lukoil said. The Grib mine is in northwestern Russia, near its border with Finland.
The majority of Lukoil’s diamond production is sold via its Antwerp-based Grib Diamonds subsidiary. Other goods are sold independently in Russia in line with local legislation. Grib Diamonds declined to comment for this story.
Sources close to Grib told Rapaport News that the company is on track to sell 2 million carats in 2015, in line with its plan for the year. The last of the company’s 10 spot auctions is scheduled for later this month.
Market sources that attend Grib auctions told Rapaport News that most of the goods on offer were sold at the October and November sales despite the weak rough market. The fact that ALROSA and De Beers lowered their supply helped since there are no goods on the market, the sources explained.
De Beers and ALROSA sales have slumped in the second half of the year as manufacturers sought to reduce their polished inventories and saw little value in current rough sold via contract sales. Dealers noted better demand on the auction circuit.
Production at the Grib mine is expected to reach about 4.5 million carats in the coming years over its 15-year life. The mine is Lukoil’s lone diamond operation and accounts for a very small portion of the company’s earnings. Lukoil reported that group revenue fell 40 percent year on year to $23.4 billion in the third quarter, while net income slumped 62 percent to $623 million largely due to the decline in oil prices.
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Tags:
grib diamonds, lukoil, Rapaport News, Russia, spot auctions
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