Vybornov Forced Out of Alrosa Top Seat (Updated)

Controversial mining and rough diamond sales policies during the current economic crises may have caused the dismissal of Alrosa President Vybornov (above)

Vybornov's confirmation to Kommersant that he is leaving the post as of July 13 ends many weeks of market rumors that he is on his way out.

"I am leaving the post of president of Alrosa as of July 13. This is the decision of the chairman of the supervisory board," Vybornov told the newspaper. Russia's Finance Minister Alexei Kudrin is chair of Alrosa's Board

It is not known what stands behind Vybornov's dismissal, however he recently led a financially challenging policy that raised many eyebrows in the diamond industry. With very limited sales since November – estimated at below $500 million – Alrosa continued to mine diamonds at a great cost.

Alrosa insisted on very high prices, some 20 percent above current market prices, and failed as a result to find buyers. Limited sales of about $350 million to the state repository Gokhran did not offset mining costs, nor provide the type of income to meet financial obligations to its lenders and credit providers.

The company is believed to hold on to a stock pile of diamonds worth nearly $1 billion.

"The collapse of the company's sales policy became the main reason for the resignation," Kommersant quoted an unnamed source on the Alrosa supervisory board.

Vybornov has served as president of Alrosa since February 2007, following the resignation of Alexander Nichiporuk.

Andreyev, 43, graduated in 1989 from the Leningrad State University, where he was an economics major. After a number of roles as an economist, he was appointed chairman of BaltOneksimBank in 1999.

His first stint at Alrosa was in 2002 when he served for a year as first vice-president.