Armenia Negotiating With Russia to Open Diamond Exchange

The Armenian government is in negotiations with Russia to receive a $100 million loan to be used exclusively for the development of a jewelry business within Armenia, the US-based Ashbarez newspaper reported Monday.

Armenian Prime Minister Tigran Sargsyan said the loan will fund the opening of a diamond exchange that will be used to supply Russian diamonds to jewelry factories in Armenia.

“If the negotiations are successful and we manage to come to an agreement with Russia-based Alrosa company, then the attracted loan will be used to develop the diamond cutting sector and to establish a modern diamond exchange in order to provide Armenian companies with Russian raw material,” the prime minister said.

Armenia’s polishing firms import most of the country’s rough diamonds from Russia. The Russian supply is not always free flowing and is impacted by Russia’s desire to exert economic pressure on Armenia.

Armenia’s polished diamond exports fell 64 percent to $39.08 million in the first nine months of 2009. In volume, exports dropped 67 percent to 60,875 carats, an average value of $642 per carat.