(Rapaport...October 25, 2004) The De Beers Group plans to mine diamonds in Ukraine as well as in Russia, Dow Jones Newswires reported October 22.
Ray Clark, the head of De Beers's Moscow office, said the company is exploring for diamonds at its jointly owned Luzshkaiya project, flying airborne surveys just south of St. Petersburg in partnership with Petroneft-Diamant. He said De Beers' investment in this project will be around $200 million in the next two years.
De Beers is also looking for diamonds near Murmansk in north west Russia and in the Donetsk region of Ukraine, Clark said. "Strategically our business is not just the marketing of diamonds, it's also the mining," he added.
De Beers has historically been a buyer of Russian diamonds and has had a sales relationship with Russian diamond producer Almanzy-Rossii Sakha, or Alrosa, spanning more than 40 years. Currently, the two companies trade on a "willing buyer, willing seller" basis, said Clark.
According to De Beers' estimate, Russia produced $1.6 billion of diamonds in 2003, 18% of world production.
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