Gokhran Rough Diamond Purchases Continues, Bought $676M in September

Gokhran's rough diamond purchases may rise to $1.5 billion this year

Russian diamond miner Alrosa sold in September 20.4 billion rubles ($676.24 million) worth of rough diamonds to the Russian precious metals and gemstones repository Gokhran, Interfax reported. Alrosa has been making large scale-sales to Gokhran since last year to offset limited sales to the market.

If the report is accurate, the September sale was one of the largest Alrosa made to Gokhran. Last week Alrosa announced that it had planned to make a large sale to Gokhran by the end of September.

Gokhran has been subsidizing, if not bankrolling Alrosa this year. In July, the repository bought $379 million worth of rough diamonds from Alrosa. This was done with an enlarged budget, after the country decided to support Alrosa by allocating additional funds to purchase diamonds.

Of the $379 million (12 billion rubles) budget, 31 percent was used by Alrosa early in the year. Another US$286 million (8.4 billion) rubles were added to the budget in June.

However a source at Gokhran told Interfax that its diamond-purchasing budget from Alrosa had been increased to 32.5 billion rubles ($1 billion). That budget may be even further increased, to $1.5 billion this year, with an additional $1.5 billion in 2010.

The added funds follow a call by Russian Prime Minister Vladimir Putin to boost support for the country's diamond industry and increase the diamond purchasing budget to 30 billion-35 billion rubles ($950 million to $1.1 billion.)

On top of rough diamond purchasing, Gokhran is also buying surplus polished diamonds, mostly from the country's largest polishing plant, Kristall. Gokhran had so far this year bought 1.96 billion rubles ($62 million) worth of diamonds from Kristall, up from 1 billion rubles ($32 million) in the whole of 2008. Additional polished diamond purchases are expected too.