Alrosa Reports Surge in Sale of Investment Diamonds

(IDEX Online) - Alrosa says sales of VAT-free investment-grade diamonds surged by 40% last year.

The sanctioned miner is increasingly polishing and selling colorless gems (over 2 carats, D to F color, IF to VS2 clarity) and fancy color stones to wealthy clients of Russian banks as part of its Diamond Exclusive investment program. Prices typically start at $20,000.

Alrosa favors the sale of its high-value stones directly to investors through partner banks, rather than taking its chances with open tenders.

Buyers benefit because they are exempt from 20% VAT. They see diamonds as a hedge against the volatility of stocks, bonds, or other mainstream investments.

Sergey Takhiev, Alrosa's head of corporate finance, announced the increase in the number of investment-grade diamonds sold, in Moscow on 16 April, but did not provide hard figures.

The Diamond Exclusive program launched in 2019 as Russia's first initiative to sell rare investment-grade diamonds directly to private clients.

What started as a niche initiative became a significant revenue stream for Alrosa after G7 nations blocked Russian diamond sales in 2022.

 "Against the backdrop of declining global diamond production, we estimate the potential for further growth in the price of investment-grade diamonds to be the highest," said Takhiev.

"Diamonds weighing 3 carats or more, the most suitable for creating investment diamonds, account for only 1-2% of total production, so a shortage in this category of precious stones is already noticeable."

Pic of investment-grade diamonds, courtesy Alrosa.