Alrosa's U-turn on Sales to Gokhran
November 28, 24
(IDEX Online) - Alrosa is to sell a batch of rough diamonds, among them a 390.7-carat stone, to the Gokhran as it battles ongoing sanctions and weak demand.
It's a U-turn for Russian miner that insisted earlier this year that it would not be using the state-run minerals depository as a safety valve.
Alrosa is already planning to scale back production and cut staff as a result of a "deep crisis" in the global diamond industry.
In January, Alrosa dismissed talk of offloading unsellable inventory to the government, boasting that it was insulated from sanctions and market forces by a "colossal safety margin".
Interfax, the Moscow-based news agency, reported at the time that the finance ministry was "not currently considering the option of supporting Alrosa by increasing funding for Russian State Precious Metals and Gemstones Repository (Gokhran) purchases".
But in a stark U-turn Alrosa announced on Tuesday (26 November) that it would "sell a batch of diamonds to the State Fund of Russia in December 2024. The gems will be delivered to the State Fund of Russia before the end of the year."
Alrosa CEO Pavel Marinychev put a positive spin on the move, saying: "Russian diamonds being in great demand all over the world will enrich our country's treasury.
"The Gokhran's intention to buy gems extracted by Alrosa shows the government's confidence in their growing value as rare and unique natural diamonds become ever-growing rarity with each passing year.
Among the diamonds is Alrosa's largest recovery in a decade - an irregular-shaped diamond weighing 390.7 carats (pictured). It was recovered at its Mayat mine, in Yakutia, by its subsidiary Almazy Anabara.
Gokhran has long functioned as a safety valve for Alrosa, stockpiling diamonds in times of trouble and selling them back when the market recovers.
During the financial crisis of 2009 Gokhran bought up $1bn of Alrosa's diamonds. And it sold back millions of carats in 2022, when a surge in post-lockdown demand outstripped the miner's production capacities.