Alrosa enjoyed a boost in sales for August, despite weakened
performance during the first half of the year. It attributed the latter to the
ruble’s recovery against the dollar and to a drop in rough-diamond prices. The
company also reported pushing through a number of initiatives in both the rough
and polished segments of the pipeline — including two auctions of large
diamonds in Russia’s far east — even as it worked to recuperate from a flood
that shut down its Mir mine in August.
Alrosa’s revenue fell 17% year on year to $2.7 billion, with
net profit for the period sliding 46% to $848 million. That was in part because
the ruble-to-dollar rate grew 18% by mid-year, the company said, and in part
because of a 15% decrease in the miner’s rough price per carat as it sold off a
greater proportion of small stones in response to recovering demand in India.
Nonetheless, August sales “were slightly higher than a year
earlier,” totaling $257.6 million, according to Alrosa vice president Yuri
Okoemov, with $255.7 million coming from rough sales, and $1.9 million from
in-house polished auctions.
In September, the company held two auctions at its
Vladivostok-based Eurasian Diamond Center (EDC) in the framework of Russia’s
third Eastern Economic Forum (EEF). The miner sold 45 large rough diamonds
weighing a total of 1,293 carats, and 33 polished diamonds ranging from 2 to 12
carats — including fancy-cut and fancy-colored diamonds — for a total of $14.8
million.
The largest rough stone weighed 75.75 carats, and the most
expensive one fetched nearly $1.75 million. The auction attracted about 50
companies from the US, India, Israel, Belgium, China and the United Arab
Emirates, said Okoemov. Alrosa launched the EDC last year as part of the
government’s decision to expand diamond trade with the Asia-Pacific region,
taking advantage of Vladivostok’s free-port status.
Vladivostok is also where Alrosa will be hosting the World
Federation of Diamond Bourses’ (WFDB) annual Asian summit next year, the
company announced. Alrosa president Sergey Ivanov recently joined the board of
the Diamond Producers Association (DPA), replacing former company vice
president Andrey Polyakov, who left the miner at the end of June.
Meanwhile, India-based manufacturer KGK Group opened a
cutting and polishing factory in Vladivostok in September. The company
announced plans for the factory a year ago as a Russian-Indian cooperation
project contributing to the development of the EDC.
The factory, which spans 1,555 square meters and employs 400
personnel, aims to produce 150,000 carats of polished diamonds annually once it
reaches full design capacity. The project’s total investment is estimated at
$50 million.
At the EEF, Ivanov also shared the company’s plan for the
Mir mine, which suffered a major flooding accident that resulted in the loss of
eight miners in August. The operation will be on hold throughout 2018, and an
independent, internationally recognized auditor will be contracted to investigate
the causes and contributing factors of the accident.
Among the candidates are SRK Consulting, whose experts
designed most of Canada’s diamond mines — including the Diavik mine, which has
ore bodies under the Lac de Gras Lake — and DMT Group, which participated in
probes of accidents at Russia’s Ulyanovskaya and Raspadskaya coal mines.
Article from the Rapaport Magazine - October 2017. To subscribe click here.