Leviev Planing to Enter Russian Diamond Mining
August 17, 04
Israeli diamantaire Lev Leviev is apparently interested in securing a steady supply of rough diamonds for his Russian polishing plants, and is considering buying a stake in a junior Russian mining company.
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Leviev is reportedly about to buy a 50 percent stake in Uralalmaz, a small diamond miner active in the Perm Oblast region in northwest Russia. The company mined 70,000 carats last year, valued at about $170 per carat, half of what it produced in volume in its heydays.
According to Russian Diamond Manufacturers Association President Ararat, Evoyan quoted in The Russia Journal, “In recent years there were no investments made into Uralalmaz. As a result, the company works with equipment that sometimes dates back to the 1950s”.
This seems like the classic candidate for a take over, if its concession still has a great deal of gems hidden within it. If that is the case, a heavy cash investment could propel the company forward and give Leviev yet another foothold in his quest to go both up and downstream to expand his diamond business.
“We have done some preliminary work to estimate what the necessary volume of investment is required to reconstruct and develop Uralalmaz,” Valery Morozov, head of Leviev's largest diamond manufacturer in Russia Ruis, told The Russia Journal.
“Making a thorough feasibility study will cost some money and require some time and good specialists, but this will be done. Preliminary estimates indicate that it is possible not only to recover the earlier volume of production, but increase it by about one-and-a-half times in several years."
Before the fall of the
However, since the country placed its diamond efforts in the far eastern side of the country, in Yakutia where Alrosa is mining today, these pipes were left largely untapped.
Uralalmaz is in the midst of a restructuring that will allow Leviev to purchase shares from management and employees.
Leviev was not immediately available to comment.