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Russia
By Svetlana Shelest
Russia’s largest diamond miner ALROSA reported a 7 percent year-on-year increase in sales volume in the first four months of 2017, having sold 16.9 million carats of rough. Yet, the revenue from sales in this period dropped 12.5 percent year-on-year to $1.7 billion. ALROSA Vice President Yury Okoemov explained that this was due to a change in the company’s sales strategy: “While in the first months of 2016, we were selling high-value rough from our stocks, as the market began picking up after the crisis of 2015, the rough on sale at the beginning of 2017 had a larger share of small-sized, lower-priced stones.” Overall, in Okoemov’s opinion, the main trend of the first four months in the global diamond pipeline was “active saturation of stocks in the midstream fueled by signs of recovery in China’s diamond jewelry retail sector.” The miner’s sales of in-house-produced polished raised $7.6 million in the January-to-April period.
In mid-May, ALROSA’s President Sergey Ivanov paid a working visit to the Republic of Angola to discuss prospects of the company’s investment projects in the local rough production. Earlier this year, ALROSA reported having sold its first two pilot batches of Angolan rough sourced at the Catoca mine, raising an estimated $10 million to $15 million. ALROSA Vice President Rinat Gizatulin shared at the time via the Russian news agency TASS that ALROSA, which owns 32.8 percent of Catoca stock, plans to sell 35 percent of Catoca rough in the future. To date, Catoca’s annual output has been estimated at 6.8 million carats. During the recent meeting with the chairman of the board of directors of Endiama, the Angolan state-owned diamond company controlling another 32.8 percent stake in Catoca, Ivanov pointed out that the project has generated “almost $600 million in 2016 and became fully sustainable,” giving reasons to expect more returns. According to Gizatulin, ALROSA will also own 50 percent of sales coming from Luaxe, another diamond mining project the Russian miner is developing in Angola, which is scheduled to go online in early 2018 and produce about 10 million carats annually. “Our geologists estimate the Luaxe rough reserves are in excess of 400 million carats, making it a very rich deposit.” Ivanov also confirmed during the visit that the miner will continue exploration works within the framework of the Kimang project, looking for more kimberlite deposits in the republic.
The Russian Assay Chamber reported that the country’s jewelry industry increased the use of gold in jewelry manufacturing 18.7 percent year-on-year in the first three months of 2017. The Russian Finance Ministry also reported that Russia’s production of gold went up by 10 percent year-on-year, totaling 55.3 tons. “This data suggests that the customers’ interest in fine jewelry is finally picking up, and the market is reviving from the three-year-long downtrend that began at the end of 2014,” Eduard Utkin, CEO of the Russian Jewelers Guild Association told Rapaport Magazine. By comparison, in 2016, Russian jewelers used 9.5 percent less gold year-on-year, and in 2015, the use of gold by jewelry manufacturers shrank by almost 40 percent year-on-year. The Russian Assay Chamber also shared that in the first three months of 2017, it stamped 7.9 million gold jewelry pieces against the almost 6.2 million pieces that were stamped during the same period in 2016. However, the Russian government announced recently its intent to double the cost of jewelry stamping by the Russian State Chamber beginning in July 2017. According to Utkin, this could cost the country’s jewelers an additional $8.8 million per year.
In a move to stimulate the uptrend, Russian major jewelry media holding company Restec JUNWEX, in partnership with the Russian Jewelers Guild Association and the Russian Jewelry Trading Club, has announced its plan to launch a new jewelry show that will focus exclusively on high-end jewelry. The first JUNWEX Premium show is scheduled to take place in November 2017 at Moscow’s World Trade Center. The show plans to attract Russia’s major premium jewelry brands and international participants. Invitations to join the show’s organizing committee have been sent out to the World Diamond Council (WDC), World Federation of Diamond Bourses (WFDB) and The World Jewellery Confederation (CIBJO). Smolensk Diamonds, a jewelry branch of Kristall Smolensk, Russia’s number one polisher; Alexey Pomelnikov Jewelry Company; multiple award-winning Moiseikin Jewelry House, owner of the “waltzing brilliance” proprietary diamond-setting technology; Estet Jewelry House; JF Carat and Master Brilliant are among the brands that have already confirmed their participation. The show will incorporate an investment forum and will launch the Fabergé Awards, a set of awards to recognize excellence in the art of jewelry-making on the global market.Article from the Rapaport Magazine - June 2017. To subscribe click here.
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