What’s happening with world’s largest diamond miner?

Diamond miner
[Image Courtesy: Israeli Diamond Industry, Alrosa]

World’s largest diamond miner – Russia-based ALROSA is going through lot of developments. Here are some key developments:

Investment-diamond project postponed

Alrosa postponed its plan to launch investment-diamond trading platform on the Moscow exchange. The trading platform that was earlier planned to be launched in late April may now launch in the summers of 2017. The company stated that they need to work out more on its implementation mechanism and address interests of all participants in the market. Besides, the company also plans to offer liquid investments and sharing mechanism to investors.

 

New president

Sergey Ivanov, currently Senior VP of Russian bank – Sberbank and son of former Kremlin administrator head was appointed by the Russian Government as the chief of Alrosa. Ivanov’s appointment was confirmed after Andrey Zharkov resigned from the post. It was reported that Zharkov had disagreements with the Finance Ministry on some budget cuts. Though the reason of his resignation is still not clear, possibly such disagreements led Zharkov to resign.

 

Branded diamond marketing

Recognising the need to raise consumer demands, Alrosa has decided to participate in GIA’s ‘mine to market’ program. The program would help Alrosa in providing authenticated information about entire lifecycle and processing of a diamond. As a first step towards branding, Alrosa has also renamed all its foreign trading subsidiaries from ARCOS to Alrosa. This would help the company to create a single corporate brand. Marking the first time of its efforts in direct marketing, the company would run pilot programs in key markets.

 

Fourfold profit in 2016

Following the decline in 2015, 2016 turned out to be a year of recovery in diamond market. Alrosa managed to quadruple its profit to USD 2.31 billion.

Alrosa’s CFO said in a statement, “The company managed to deliver record-high financial performance and generate net cash flow sufficient to repay short-term and medium-term liabilities and pay out dividends to shareholders.”

7% increase in the total sales of February 2017 were also reported, the diamond producer said that its total diamond sales for the month were USD 401.9 million.

 

Diamond Detector machines

Alrosa is all set to launch its diamond detector machines in May at Mediterranean Gemological and Jewelry Conference in Syracuse, Italy. Using 3 analytical methods, the detector machines would screen loose diamonds and jewelry. For a test run, 3 gemologists would be testing 50 samples of mined, treated and Lab-grown diamonds on 11th and 12th May.

 

Starts selling Angolan diamonds

Alrosa recently sold 2 diamond batches from its Angloan processing facility – Catoca, with a deal size of around USD 10-15 Mn. The company’s Angolan partners allowed Alrosa to participate in sales since Feb 2017. Rinat Gizatulin – VP, Alrosa said that the company plans to sell 35% of diamonds from Catoca and at least 50% from its Lauxe deposit. Alrosa plans to operationalize Lauxe deposit by early 2018 with capital investment of USD 1 Bn.

 

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