An Alrosa Sight System in Sight – to Be in Place in 2008
October 16, 07
Russian diamond miner Alrosa is putting the finishing touches on a sight system, expected to be put in place by 2008. Alrosa is currently drafting the idea, planning to complete it by December.
According to the plan, Alrosa will have a number of clients that can purchase $100 - $250 million a year, as reported on IDEX Online in June. Clients will have to agree to a price formula set in the agreement between them and Alrosa. “We will share with our clients earnings from price increases, Alrosa President and CEO Sergey Vybornov told IDEX Online. “But they will also have to take share in price decreases.”
The three year contracts will start next year, after current contractual sales obligations expire this December.
Clients can be from any country, though Alrosa may be required to have a 50 percent local supply.
Since the EC and De Beers have agreed to taper off De Beers’ rough diamond purchases from Alrosa, the Russian mining firm has been faced with the arduous task of independently selling its rough diamonds outside of Russia.
To do so efficiently and economically, developing a set number of clients that can regularly buy its goods is an important marketing task for Alrosa. The company, more secretive then most in the industry, has apparently been developing the system behind the scenes.
What shape will this take, with whom will the sales be conducted and how often, are not known at this stage.
Tenders of 10.8+ carat goods will continue as they are now, since the tender system for large goods is preferred for the high prices realized at them.