Russian Diamonds’ New Supply Roadmap

Russian diamond industry’s rise has been phenomenal and to further accelerate this growth, the industry is taking a gamut of measures that will define its new supply roadmap. Prominent among them is focus on the Indian market.

Despite accounting for 90% of world’s diamond processing and almost 80% of global talent engaged in the core diamond and related industries, Indian diamond retail market is far from its potential. But Alex Popov, founder president of Moscow Diamond Bourse (MDB) and member presidium of World Federation of Diamond Bourses (WFDB) sees a vast potential of Russian diamonds in Indian markets. Although in the short run the Indian markets may not yield a substantial contribution. In 2011, Alex Popov also became the chair of World Diamond Mark (WDM) – a quasi-marketing arm for the entire diamond industry, whose focus is to boost global consumer demand for diamonds. Its immediate promotions will happen in geographies of Turkey, Dubai, China and Hong Kong.

Alrosa – one of the world’s largest diamond producer, almost entirely represents the Russian diamond industry. To reinforce its sales and strengthen its client portfolio, Alrosa is planning to enter into long-term contracts for supply of polished diamonds. The mining major currently has 45 long-term clients for its gem quality diamonds but it wants to augment this number with other clients who purchase the company’s roughs through spot market and tenders. For its 2015-17 contract period, the company has already started negotiations and signing of new contracts is expected to happen in November this year.

Similar to De Beer’s new Sightholder policy, Alrosa is also now concentrating on its Alrosa Alliance. Only prospects that meet the company’s selection criteria, which includes stable financial and solvency conditions, will be considered for long-term contracts. During the period of contract, all long-term clients will be authorized to use the Alrosa Alliance logo.

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[Image Courtesy: Alrosa]

Alrosa is also exploring the possibility of focalizing the cutting and polishing operations for all range of stones, in its in-house facilities.

At the same time, the company is also looking towards stabilizing and building up its resources and production. After fall of Q2 output by 16% YoY, Alrosa is partnering a Zimbabwe-Russia JV to prospect diamonds in the southern African country.

These and other such steps will drive and shape the new supply roadmap for Russian diamonds.

 

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