Alrosa Profits up 88% Despite G7 Sanctions

 

Alrosa reported an 88% jump in its FY2025 profits, as it cut costs, improved efficiency, diversified into gold and benefited from a weaker ruble.

Russia’s state-controlled miner has been selling rough to India, China and elsewhere since the G7 nations imposed full sanctions in March 2024.

Net profit for FY2024 plunged by 75% as a result of the sanctions, down to RUB 21.2bn ($248m).

But it rebounded last year, up to RUB 36.2bn ($468m), according to the company’s full-year 2025 financial disclosure, dated 27 February.

Revenue slipped by 1.7% year-on-year to RUB 235.1bn ($3.04bn), but earnings (EBITDA) were up 26% to RUB 57.8bn ($748m).

The company produced 29.7m carats, a 10% drop from the previous year, sold 26.2m carats, a 20% drop from the previous year, and stockpiled the remainder.

The surge in profits came as Alrosa shuttered unprofitable diamond mines and diversified into gold as a strategic buffer against diamond market volatility and sanctions.

It invested RUB 8.3bn ($105m) in the Degdekan Project, projected to yield 3.3 tonnes of gold annually by 2030, and is exploring the potential for gold extraction from tailings at its Mirny mine.

“In 2025, the diamond industry continued to be pressured by several factors, including geopolitical and macroeconomic uncertainty and changing consumer preferences, which led to a decline in jewelry demand and an increase in diamond inventory in the cutting and polishing sector,” the company said.

“To stabilize the market, major diamond producers continued to limit supply and reduce prices. This strategy partially stabilized the negative diamond price dynamics.

“In the short term, the challenging market situation will persist: excess inventory in the midstream, as well as the ongoing imbalance between supply and demand, will continue to put pressure on prices and limit the potential for increased sales volume for the group.”

Source: DCLA

TAGS FEBRUARY 2026 DUBAI MARKET & TENDER REPORT

 

There appears to be an improvement in both overall mood and confidence amongst buyers this month. We believe the reason behind this has been the recent behaviour of the leading producers, De Beers, Alrosa, and Angola. If we look at the last quarter of 2025, all 3 producers were distributing broadly, substantial volumes of goods, whether in boxes or special deals across all the major centres to anyone willing to buy. However, by the year end all 3 producers tightened distribution significantly. De Beers only sold a “special deal” to one customer, as did Alrosa, and Angola (Catoca) reduced from ten boxes to just three. Luelle followed suit reducing from ten boxes to just five. This served to tighten both supply and distribution.

The sale of De Beers by Anglo American continues with ongoing speculation as to which consortium will be the purchaser. Following the publication of De Beers full year figures released on 20 th Feb, there was a further $2.3 billion write down of the company. This is the third write down in as many years bringing the company to a $2.3 billion valuation.

We believe that once a clear leadership role is established, it will provide a further boost to confidence within the industry.

Rough

As seen recently larger sizes of rough +10cts remain in good demand, as do the 5-10ct ranges reflecting strong prices, where 2 carat polished is in good demand. 2-4 carat goods are also strong, but it seems this has still to be reflected fully in the polished prices of 4grs. The 3-6grs, which for several months have been less popular, have seen a resurgence in demand primarily since De Beers adjusted their prices last month, however again this demand is surprising because sales of pointer polished remain slow.

An area of significant change has been the smalls -3grs. While price in these areas remains key, we are seeing some demand. This is in stark contrast to the situation at the end of 2025, just 6 weeks ago, when customers had no appetite to even look at the goods.

Last week De Beers informed its customers that some goods could be refused prior to the Sight without negatively impacting the customers ‘demonstrated demand’ quota. These were primarily in some area -3gr +7, and -7, and all Near Gem and Industrial boxes. This might indicate that there will currently be no price adjustment made in these areas during the February Sight.

Overall, it is expected that again De Beers will keep distribution tight which will continue to help the market. Alrosa commenced sales this week and echoed the general sentiment, with prices in the 2-10ct ranges increasing by between 3-5%. Mid-range sizes 4-6grs reduced by 2-3%, to fall in line with market prices. -9 sizes have also been reduced to reflect current market price.

All these adjustments are broadly aligned to market demand, so although perhaps fragile, as polished sales are slow, the market seems to be finding an equilibrium.

ODC sales run from 16 th – 25 th Feb, where they will present 972,000 carats, including some ROM parcels purchased last Oct.

Polished

Polished prices seemed to have slowed their decline in several areas, noticeably 0.30-1.00 carat sizes. Overall, polished markets at retail level are seasonally quiet. In US there has been demand for 1.50 carat and larger in Rounds and Fancy shapes, and Valentines sales look positive. Indian polished demand slowed slightly due to high gold prices, and China remains weak.

The Interim Agreement framework, between US and India, announced in early February, under which zero tariffs will be applied to diamonds and coloured gemstones entering the US from India has been unanimously welcomed. Currently tariffs have been reduced to 18% (effective March 2026) which will provide immediate relief and once the agreement is concluded full zero tariff should revive competitiveness. The effect of tariffs last year resulted in a 60% fall in polished diamonds exports to the worlds leading market. It is expected that India may pause exports to the US, while final terms are discussed. Tariffs on finished jewellery will remain at 18%.

TAGS Tenders

We presented our latest tender from 16 th – 20 th Feb. The event consisted of a full range of size categories and qualities with an emphasis on +5 carats. The value was more than $16m, and we welcomed well over 100 companies to view. We concluded a sell through of 60% to a total of 46 international companies. As expected, the strongest bidding took place in the larger sizes and higher qualities.

Our regular tender of high quality Southern African production commences on 1 st March until 6 th March, and this will be followed by another Zimbabwe production from ZCDC, which will run from 8 th -12 th March.

Source: DCLA

Alrosa to Extract Gold as Byproduct of Diamond Mining

Alrosa plans to extract gold from its diamond-bearing alluvial deposits in Mirny, in Russia’s Sakha Republic.

The move comes as demand for natural diamond continues to slide, and gold prices reach record highs.

Alrosa, Russia’s state-controlled miner, announced on Friday (24 October) that it was “considering extracting gold as a byproduct during diamond mining at the Mirny-Nyurba Mining and Processing Division”.

Gold was first found in the area in 2020 and Alrosa says a team of geologists has so far recovered 433kg of it.

The proposal is that gold will be recovered as a byproduct from diamond-bearing sands and placer deposits (accumulations of valuable minerals) in the Mirny area. Alrosa will use existing processing facilities.

In 2024, the company bought the Degdekan gold deposit in the Magadan region – in a notable departure from its core activity of diamond mining.

It said it would invest over $100m in the project, which is expected to produce about 3.3 tonnes of gold annually when it reaches full capacity around 2030.

Source: DCLA

Alrosa’s $240m Plan to Dig Deeper at Udachny Mine

Alrosa is to invest RUB 20bn ($240m) digging deeper to extend the life of the vast underground Udachny mine, just outside the Arctic Circle, until at least 2055.

Mining will eventually take place more than 1km below the surface, extracting 4.1m tonnes of ore annually. The target horizon – the level where mining operations are planned – is 1.13 km below the surface ( at an absolute elevation of -780 m, when taking the surface elevation as a baseline).

Alrosa CEO Pavel Marinychev says annual profit from the planned expansion is estimated at almost RUB 6bn ($73m) a year.

Udachny opened as open-pit mine in 1967 and switched to underground operations in 2014, producing over 10 per cent of Alrosa’s total output. It was due to reach the end of its life in 2039.

Alrosa said the investment committee had approved the project. Udachny is one of the world’s largest kimberlite pipes. Trucks take over 30 minutes to reach the bottom, currently 680 metres below the surface.

“The implementation of the investment project will enable us to significantly extend the duration of mining at the deposit, which currently produces more than 10 per cent of Russian rough diamonds,” said Marinychev.

“From 2025 through 2055, 4.1 million tonnes of ore will be mined here annually and profit is estimated at almost 6 billion rubles per year.”

Source: DCLA

Alrosa Starts Mining at New Kimberlite Pipe

Alrosa has started operations at additional kimberlite pipe at its Lomonosov deposit, one of the largest diamond mines in Russia.

The state-run miner said on Tuesday (8 July) that the Karpinsky-2 pipe, one of six at Lomonosov, held more than 40m tonnes of diamond bearing ore.

Its subsidiary, Severalmaz, already mines two other pipes at the site in Arkhangelsk, northwestern Russia – Arkhangelskaya and Karpinsky-1 – and is now mining Karpinsky-2.

Alrosa, currently sanctioned by the G7 nations, said in March that it was suspending production at four low-margin mines – Zapolyarny, Magnitny, Khara-Mas and Ochuos – because of a “deep crisis” in the industry.

It is also selling a large proportion of its output to Gokhran, the state repository of precious metals and gemstones.

Gokhran has historically functioned as a buffer, stockpiling diamonds during market downturns and selling them back when demand recovers, for example, during the 2009 financial crisis.

Source: DCLA

Russia Still World’s Biggest Diamond Producer

Russia remained the biggest rough diamond-producing country in the world in 2024, by both volume and value, despite the impact of G7 sanctions.

By volume it accounted for 32 per cent of global production in 2024 – or 37.3m carats – according to newly-released figures by the Kimberley Process Certification Scheme.

And by value it accounted for 29 per cent – or $3.335bn.

Botswana came second by volume – 24 per cent, 28.2m carats – and a very close second by value – 28.8 per cent, $3.308bn.

Overall global rough output fell 10 per cent to $11.48bn.

India was the biggest importer (40 per cent by carats, 39 per cent by dollars) followed by UAE (29 per cent by carats, 24 per cent by dollars).

Source: DCLA

Moscow Investigators Uncover Diamond Theft Scheme Involving Alrosa Employee

Moscow investigators on Monday said they сharged an employee of the state-run diamond producer Alrosa, her son and two others in connection with a diamond theft scheme at the company.

Valentina Matyushenkova, an Alrosa employee, is accused of swapping high-value diamonds with cheaper industrial-grade stones between September 2024 and January 2025, according to Russia’s Investigative Committee.

Authorities say the stolen diamonds were smuggled to Armenia.

Matyushenkova was caught in the act while attempting to steal a batch of diamonds valued at more than 1.7 million rubles ($21,700), investigators said. Her son, Alexei Matyushenkov, is accused of acting as a middleman.

Two other suspects, Armen Petrosyan and Arman Sahakyan, allegedly transported the stolen stones across the border to Armenia.

A video published by the Kommersant business newspaper showed Matyushenkova confessing to her role in the scheme during questioning. One of the other suspects claimed he was working as a deliveryman at the time of his arrest.

Searches of the suspects’ homes uncovered some 200,000 carats of low-grade industrial diamonds, which investigators say were used to replace the high-quality raw stones.

All four suspects have been placed in pre-trial detention. If convicted, they face up to 10 years in prison on theft charges and up to seven years for the illicit trafficking of precious stones and metals.

Source: DCLA

Alrosa Concludes Sale of Share in Catoca

Alrosa has concluded the sale of its 41 per cent share in Catoca, Angola’s state-controlled diamond miner, drawing an end to a 32-year partnership.

It has been acquired by Taadeen, a subsidiary of Oman’s sovereign wealth fund.

The move was announced last November, after Angola’s mineral resources minister Diamantino Azevedo described Alrosa, the sanctioned Russian miner, as a “toxic partner”.

The transfer was formalized on 26 May and leaves Angola’s national diamond company Endiama EP retaining a controlling 59 per cent.

Catoca’s updated website now lists its company shareholder structure as: “Endiama EP (National Diamond Company of Angola) – 59% Taadeen (Subsidiary company of the Sovereign Wealth Fund of Oman) – 41%”.

No financial details of the share transfer have been released.

Alrosa acquired 32.8 per cent of Catoca shares in 1992, soon after the country’s long-running civil war came to an end, and increased its stake to 41 per cent in 2018.

Source: DCLA

Mining Company Alrosa Unveils Russia’s Largest-Ever Diamond

Russian diamond producer Alrosa announced Friday that it finished the two year cutting process of the country’s largest ever diamond a 100 carat vivid yellow stone named New Sun.

New Sun was cut from a billion year old 200 carat rough diamond, which was unearthed from an ancient riverbed at the Ebelyakh mine in the Far East republic of Sakha (Yakutia).

Alrosa said 15 of Russia’s top jewelers worked meticulously to “achieve the perfect balance between light, color and the play of shades.”

“Thanks to the highest skill of Russian experts, the diamond has acquired impeccable proportions that accentuate its depth and brightness of its sunny hue,” the company said.

The cutting process marks a “new stage” in the development of the Russian Cut, a gem cutting technique known for its precision and brilliance, Alrosa said.

“New Sun is one of the most significant events in the gemstone industry in recent years, highlighting Russia’s high status in the global diamond industry,” the company said.

Last month, Alrosa announced the temporary suspension of operations at several less profitable sites, reducing annual production by less than 1 million carats. The company still plans to produce 29 million carats of diamonds in 2025.

Alrosa, which is under an EU and G7 import ban, is the world’s largest diamond mining company by volume. It cut production by 2.8% to 34.6 million carats in 2023 and by 4.6% to 33 million carats in 2024.

Source: DCLA

ALROSA Predicts Rising Demand and Diamond Prices in 2025

Russian diamond giant Alrosa

The high demand for jewelry and a decline of up to 20% in global diamond mining volumes compared to levels recorded 5-6 years ago will drive the industry’s growth, according to Sergey Takhiev, Head of Corporate Finance at Russian diamond giant Alrosa, reported by Rough&Polished.

According to Takhiev, while diamond prices are currently at a low point, demand is expected to grow due to a reduction in diamond inventories at manufacturing centers in India and a decline in diamond production volumes by major mining companies.

When asked about the timeline for market inventory replenishment, Takhiev estimated it would likely occur within a few months. He explained that the restocking of rough and polished diamond inventories is expected to impact the entire value chain, from manufacturers to retailers. Takhiev further emphasized that the depletion of global diamond resources, coupled with growing demand for luxury jewelry, is set to drive long-term price increases.

Meanwhile, ALROSA announced that the company’s Deputy CEO, Vladimir Marchenko, who has held the position since 2018, will step down to take on another role in the mining industry.

Source: DCLA

Diamond miners face turning point amid weak prices

The diamond industry, once a symbol of timeless stability, finds itself in a state of flux as prices for natural diamonds hit multiyear lows, driven by a mix of evolving consumer preferences, geopolitical upheaval, and the meteoric rise of lab-grown diamonds (LGDs), a new study shows. 

The reversal of fortunes that followed a surge during the covid-19 pandemic has left industry stakeholders grappling with how to adapt to ensure long-term sustainability, consultancy McKinsey & Company says in its latest report.

During the pandemic, diamond prices rose unexpectedly. Supply chain disruptions and the delay of weddings initially dampened sales, but many consumers stuck at home turned to diamonds as a form of self-care. This led to an unanticipated spike in demand and a sharp rise in prices. 

The post-pandemic market has painted a very different picture. As traditional engagement and marriage cycles return and supply chains normalize, prices have tumbled amid changing market dynamics, McKinsey & Co. says.

Ten years ago, young customers were an important segment of the overall demand for precious stones. Today, they seek more affordable and ethical alternatives.

With prices up to 80% lower than mined diamonds, LGDs have swiftly carved out a substantial share of the market, challenging traditional producers, the report shows.

Shifting customer values

Increased awareness of environmental, social, and governance (ESG) issues has also driven consumers to demand greater transparency and sustainability in diamond sourcing. Many buyers now insist on proof that their diamonds were mined under fair conditions with minimal environmental impact. This shift is particularly pronounced among younger generations, who are reshaping the jewelry market with their purchasing power and values.

Generation Z is leading a wave of change, favouring ethical and customizable products over traditional offerings. Younger buyers are more likely to seek out jewelry that aligns with their values, including fair labor practices and sustainability.

Many are turning to digital platforms for their purchases, with online fine jewelry sales growing significantly. In 2021, the average online purchase of diamond jewellery in the US was $2,204, compared to $2,994 in physical stores, signalling a growing comfort with digital transactions for high-value items.

The trend of self-purchasing is another key shift. Rather than waiting for significant life events like engagements or weddings, many consumers are now buying fine jewelry for themselves.

Industry actors Beers Group and Signet Jewelers launched in October their “Worth the Wait” campaign, aimed at reigniting demand for mined diamonds from youngsters, particularly amid “zillennials”, the microgeneration born between 1993 and 1998.

Geopolitical and gov’t factors

Adding to the industry’s challenges are geopolitical tensions. Sanctions targeting Russian diamonds have disrupted the global supply chain, particularly for larger stones. Russia’s Alrosa, once the world’s top diamond producer by output, has been heavily sanctioned by the US and the European Union, creating regional dislocations. 

McKinsey & Company warns that, by March 2025, these restrictions will tighten further, targeting stones of 0.5 carats and above, exacerbating supply chain issues.

The upheaval comes at a time when natural-diamond production is already constrained. Growth in supply is expected to remain sluggish, with an annual increase of just 1–2% through 2027, far below historical trends. Major mining companies are grappling with depleting resources, forcing them to shift from open-pit mining to more expensive underground operations. Companies like De Beers have invested billions to extend the life of their mines, but these efforts are costly and time-consuming.

Government intervention is also reshaping the industry. In diamond-rich regions, including Botswana, public authorities are taking larger stakes in mining operations, emphasizing the need for transparent and sustainable practices. 

Despite the challenges, there are opportunities for companies willing to adapt, the consultancy says. Producers can diversify their offerings by incorporating LGDs or recycled diamonds into their portfolios. They can also emphasize the unique, intrinsic value of natural diamonds, appealing to consumers who value rarity and tradition. Investments in sustainability and digital commerce are likely to pay dividends, as consumers increasingly demand ethical and seamless shopping experiences.

The consultants conclude that by embracing innovation and aligning with shifting consumer values, the industry may find a way to shine brightly once more.

Source: Mining.com

KP Votes to End Ban on CAR Diamonds

The Kimberley Process voted to allow rough diamond exports from the Central African Republic (CAR) after imposing a ban in 2013 as a civil war raged.

The Seleka, a coalition of predominantly Muslim rebel groups, toppled the government in a conflict, reportedly funded by conflict diamonds, that saw widespread killings, rapes, and destruction of villages.

The country – one of the world’s poorest – still faces significant challenges in establishing lasting peace and stability, although the government and its Russian mercenary allies have since pushed rebel groups out of major towns.

The KP, at its plenary in the UAE last Friday (15 November), voted to re-admit CAR as a full member, in light of what it described as “an improving security situation”.

Diamond exports have, until now, been outlawed from the so-called red zones – representing two thirds of his country’s diamond mining areas. They will now be allowed. 

Legal exports, from CAR’s green zones, totaled just under $8m in 2020, the latest year for which KP has figures – 50,433 carats for an average $142 per carat.

Rufin Benam-Beltoungou, CAR’s minister of mines and geology spoke of his “joy and satisfaction” over the full lifting of the rough export ban.

UAE’s Kimberley Process chair, Ahmed Bin Sulayem, travelled to CAR and had pushed extensively for the KP to initiate a review mission to fast-track the country’s reintegration.

Source: DCLA

PS: Plain to see that the Kimberley Process is a political tool and not a safegaurd for the diamond industry.

Russia’s finance ministry considering new diamond purchases from Alrosa in 2025

Russia’s Finance Ministry is considering new purchases of rough diamonds from Alrosa for the State Precious Metals and Gemstones Repository (Gokhran) in 2025, Deputy Finance Minister Alexei Moiseyev told reporters on the sidelines of the Moscow Financial Forum.

“We are considering this possibility,” Moiseyev said in response to possibly resuming purchases. “In order to allow Alrosa the opportunity to be calm and not feel obliged to sell on the market in order to maintain its liquidity position. Because the market looks alarming.”

The government could use budgetary allocations for precious metals and stones to purchase rough diamonds. The purchase limit is planned at 51.5 billion rubles for next year, Moiseyev said.

It became known in March that Alrosa and the Finance Ministry had concluded an agreement to buy out part of the raw materials produced in 2024 and completed a transaction for the first consignment of rough diamonds. There have been no reports since then regarding Alrosa purchasing diamonds from Gokhran.

“There are no plans for this year, though we are considering the possibility for next year,” Moiseyev said. “In general, this is all confidential, so we may not announce it.”

Russia Increases Rough Exports to India

Russian exports of rough diamonds to India increased by well over a fifth, to 4.1m carats, during the first six months of the G7 sanctions.

Total sales were up by 22.23 per cent for January to June 2024, according to the Indian Ministry of Commerce and Industry. But revenue fell by 15.22 per cent, as prices keep declining, from $614m to $520m.

Russian exports for June alone were 347,620 carats, an increase of almost 32 per cent on the same month last year.

The G7 and EU nations imposed sanctions on all Russian diamonds of 1.0-cts and above, regardless of where they were cut and polished, from 1 January. The threshold was lowered to 0.50-cts and above from 1 September.

Rough diamonds imported from Russia to India can only be sold to markets beyond the G7 and EU.

India’s diamond industry has been calling on the government to allow direct payments to Russia so it can more easily buy sanctioned goods.

Source: DCLA

US Lifts Ban on Grandfathered Diamonds Amid New Sanctions on Russian Gems

The Office of Foreign Assets Control (OFAC) has issued new licenses under the Russian Harmful Foreign Activities Sanctions Regulations, allowing for the sale of diamond jewellery and loose gem-quality diamonds imported before recent sanctions were implemented. This significant policy shift permits goods that were previously prohibited to re-enter the market.

Under the new guidelines, diamond jewellery purchased before March 1, 2024, as well as loose diamonds of 1 carat or larger bought before that date, and those of at least 0.50 carats purchased before September 1, 2024, can now be sold. The relaxation for loose diamonds will remain in effect until September 1, 2025.

However, starting September 1, 2024, the next phase of G7 diamond sanctions will impose restrictions on all goods of 0.50 carats or above from Russia, regardless of where they are cut and polished. This phase of sanctions is set to take effect next Sunday, despite substantial opposition from various industry stakeholders.

In response, the Jewelers Vigilance Committee has reported that the United States is considering supporting a delay in the implementation of these sanctions. This potential delay, which aligns with the European Union’s proposed extension to March 1, 2025, aims to provide additional time to resolve the intricacies of the sanctions and their impact on the diamond trade.

Source: DCLA

Antwerp World Diamond Centre CEO resigns amid Russia diamond sanctions

Antwerp World Diamond Centre (AWDC) chief executive Ari Epstein resigned unexpectedly on Thursday, the AWDC’s board of directors said in a statement.

A spokesperson for AWDC, Belgium’s main diamond industry group, said on Friday that Epstein, who had been CEO for 13 years, did not wish to communicate about the reason for his sudden departure, but Belgian financial newspaper De Tijd reported that Russian diamond sanctions had been the cause of conflict between the diamond sector and the Belgian government.

AWDC did not say who would replace Epstein as CEO. Epstein did not immediately respond to a request for comment sent via LinkedIn.

Following an EU ban on Russian-origin diamonds that took effect on March 1, rough and polished diamonds have to enter the EU and G7 countries with documentary proof and declarations that the stones are not of Russian origin.

Antwerp’s diamond dealers have said they are facing long and costly delays as a consequence.

Source: DCLA

US to Require Self-Certification for Russian Diamond Ban

The US and the UK will require importers of polished diamonds weighing 1 carat and above to apply a “self-certification” declaring the stones are not of Russian origin, while the UK will also expect documentary proof in some cases.

The new US guidelines are a follow-up to last month’s directive by the US Office of Foreign Assets Control (OFAC) implementing tighter restrictions on loose Russian diamonds and those set into jewelry that had been in part or fully manufactured or “substantially transformed” in another country. The rules address a loophole that had been in place since the US first imposed sanctions in March 2022.

The US Customs and Border Protection released an update to the bans beginning March 1, calling for importers to upload a PDF on official company letterhead, it said last week. For nonindustrial diamonds, the self-certification should state: “I certify that the nonindustrial diamonds in this shipment were not mined, extracted, produced, or manufactured wholly or in part in the Russian Federation, notwithstanding whether such diamonds have been substantially transformed into other products outside of the Russian Federation.”

Those bringing in diamond jewelry or unsorted diamonds should submit a document saying: “I certify that the diamond jewelry and unsorted diamonds in this shipment are not of Russian Federation origin or were not exported from the Russian Federation.”

The UK government’s Department for Business and Trade has followed suit, noting that supplier declaration of compliance with the sanctions “may be acceptable,” but that “traders should be prepared to provide documentation to demonstrate evidence of a stone’s supply chain.” That evidence can include the original Kimberley Process (KP) certificate issued when shipped from the diamond’s origin country, an invoice, a certificate of origin issued by a chamber of commerce, or a diamond origin report. The government also distributed rules for diamonds manufactured in another country that were outside of Russia before March 1.

Last week, the London Diamond Bourse (LDB) held an emergency meeting to discuss the ban due to the “absence of clarity and guidance…as to how we might conform with the restrictions…in terms of paperwork and provenance” before the March 1 launch, it said. The exchange noted it was in an “invidious” position and felt its members and the greater trade should avoid importing polished loose diamonds above 1 carat until there is “less ambiguous guidance.” The bourse may put out updated guidance following the release of the new rules.

While neither the US or the UK has given a timeline as to how long these guidelines will be in effect, it’s likely the less restrictive rules will only be valid during the “sunrise period,” which ends August 31 and allows importers time to become accustomed to the new measures. The European Union has stated that it would accept documentation proving non-Russian origin during the initial timeframe but will expect all stones passing through Antwerp to be placed on a traceability system beginning September 1. At that point, restrictions in all Group of Seven (G7) nations — Canada, France, Germany, Italy, Japan, the US and the UK, as well as the EU — will expand to include diamonds weighing more than 0.50 carats.

For its part, Canada also produced a statement noting it would comply with the March 1 curbs against indirect imports of Russian-origin diamonds.

“Canada has been at the forefront of imposing economic barriers on the Putin regime,” said Mélanie Joly, the country’s minister of foreign affairs. “Along with our allies and partners, we have imposed severe sanctions on the Russian regime, and we will continue to do so to hold [Russian President Vladimir] Putin and his enablers to account.”

The current self-certification rules are likely to provide a temporary solution to concerns industry groups voiced over a proposal that all diamonds would be funneled through Antwerp for screening and certification prior to arriving at their destination countries, a move the organizations feared would harm the rest of the industry.

On Saturday, India’s Gem and Jewellery Export Promotion Council (GJEPC) sent a message to members urging them to “review guidelines meticulously,” and “exercise utmost caution when dispatching shipments to G7 countries.” The council also advised exporters to “maintain meticulous records of all documents of import and purchase.” A large portion of the world’s rough is manufactured in the country before making its way to consumer nations.

“It is crucial to emphasize that while some of the G7 countries/EU have already issued guidelines to their importers, a few are still in the process of finalizing theirs,” the GJEPC said. “We believe even the issued ones are initial guidelines and are subject to changes [and] updates during the course of time.”

Source: DCLA

Alrosa Sales Rise Despite Sanctions

Alrosa’s revenue rose in 2023 as the Russian diamond miner continued to sell despite sanctions.

Sales increased 9% to RUB 322.57 billion ($3.55 billion) for the year, the company reported Wednesday. However, net profit fell 15% to RUB 85.18 billion ($939.3 million).

Alrosa and its diamonds have been the subject of sanctions by the US and other Western countries since Russia’s war in Ukraine began in February 2022. Major markets including India and China still permit imports of Russian diamonds. On March 1, the US will introduce stricter measures banning the import of 1-carat and larger stones of Russian origin, even if they went through manufacturing in a third country.

The miner’s announcement was its second full results statement since March 2022. On both occasions, it withheld information on the destination of its sales, which usually shows Belgium, the United Arab Emirates (UAE) and India to be the largest buyers.

Last week, De Beers reported a 36% drop in 2023 revenue for a total of $4.27 billion, with the diamond unit recording a net impairment of $1.56 billion, reflecting a weaker demand outlook.

Source: DCLA

Russia diamond producer Alrosa’s annual net USD profit drops

Russia’s sanctions-hit diamond producer Alrosa, opens new tab on Wednesday reported 2023 net profit of $925 million, down 15.2% from the previous year, Turnover was up 9.2% at 322.6 billion roubles.

Group of Seven leaders agreed in December to ban non-industrial diamonds from Russia by January, and Russian diamonds sold by third countries from March.

The European Union added Alrosa, Russia’s biggest diamond producer, to its sanctions list in January as part of punitive measures it has imposed on Moscow over the war in Ukraine.

Russian Diamond Ban Will Have “Sunrise Period”

The G7’s sanctions on Russian-mined polished diamonds, set to go into effect March 1, will have a six-month “sunrise period” to let the industry adjust to the new rules, according to a statement from the U.S. Embassy in Botswana.

The ban will initially apply to polished diamonds at least one carat in weight, then expand in September to a half-carat and larger.

To verify the diamond’s provenance, the G7 will establish a new certification system based in Belgium. From March through August, G7 certification will be recommended; as of Sept. 1, it will be required.

G7 leaders committed in February, May and December 2023 to work collectively to reduce the revenue Russia uses to finance its illegal war against Ukraine that is derived from its diamond trade. The December G7 statement included the following language:
We will introduce import restrictions on non-industrial diamonds, mined, processed, or produced in Russia, by January 1, 2024, followed by further phased restrictions on the import of Russian diamonds processed in third countries targeting March 1, 2024. To further the effectiveness of these measures, those G7 members who are major importers of rough diamonds will establish a robust traceability-based verification and certification mechanism for rough diamonds within the G7 by September 1, 2024, and we will continue to consult with partners, including producing and manufacturing countries on its design and implementation. We will continue consultations among G7 members and with other partners including producing countries as well as manufacturing countries for comprehensive controls for diamonds produced and processed in third countries on measures for traceability.
Russia is the world’s largest rough diamond producer by volume and a significant global diamond exporter (> US $3.8 billion in exports in 2022). Its state-owned diamond mining conglomerate, Alrosa, accounts for 95% of Russian diamond production and is the largest diamond producer in the world by volume and second largest by value.
Approach

A “direct ban” on Russian imports (direct flows of non-industrial diamond goods exported directly from Russia to a G7 country) is in place by all G7 members as of January 1, 2024.
Specific measures and timelines are being developed to prevent indirect flows of non-industrial diamonds mined in or (for certain G7 partners) transited through Russia. This includes diamonds which are exported, processed and/or polished, in a third country and afterwards imported by a G7 member.
To avoid unintended negative consequences and undue burden on other diamond industry stakeholders, the G7 is consulting key partners, including producing and manufacturing countries, as well as industry, on proposed controls and traceability measures for diamonds produced and processed in third countries. This consultation will continue with virtual meetings and possible future in-person visits.
Through phased-in implementation, the indirect ban of Russian diamonds from G7 markets is expected to begin on March 1, 2024, with the banning of non-industrial natural diamonds mined in Russia sized 1.0 carat and larger.
The G7 is targeting September 1, 2024 to extend the indirect ban to all non-industrial natural diamonds mined in Russia sized 0.5 carats and larger.
To further the effectiveness of these measures, the December G7 statement indicates that those G7 members who are major importers of rough diamonds will establish a robust traceability-based verification and certification mechanism, detailed further below. This is envisaged to be fully operational by September 1, 2024.
From March 1, 2024, it will be encouraged to identify all non-Russian diamonds above one carat entering a G7 country through this traceability mechanism.
During a “sunrise period” from March 1, 2024 to August 31, 2024 documentary supply chain evidence will also be accepted by G7 countries, ahead of full operationalization of the traceability mechanism. Further details will be made available ahead of March 1st.
From September 1, 2024, use of the traceability mechanism will be required for import into the G7, for diamonds sized 0.5 carats and larger. In this context, traceability will be expected to begin at the point of the first export, rather than the mine-site, though we encourage mine-level traceability where possible.

Options are being considered with respect to how to treat existing stocks of diamonds (grandfathered diamonds) and jewelry.
A G7 technical working group, led by the European Commission, has been established to continue consultations and provide recommendations on the way forward. Governments and industry stakeholders are encouraged to engage with the technical group, with the understanding that ultimate decisions concerning the import requirements for G7 countries are taken consistent with respective national systems.
Traceability mechanism detail

To ensure the provenance of diamonds entering G7 countries, a certified traceability mechanism known as “G7 Certification” will be recommended as of March 1, 2024, and required as of September 1, 2024.
G7 Certification will verify and certify the provenance of rough diamonds from the point of first export through the use of a central import hub in Belgium during the period when the traceability mechanism system is tested. Thereafter, other credible options to the single node can be considered. Diamonds will then carry this verification throughout the supply chain, including through polishing, processing and manufacturing. This will enable stones to be checked at the point of import into the G7, ensuring their non-Russian provenance.
G7 Certification will work by using and expanding on existing tracing technologies and controls.
Diamond producers and manufacturers, throughout the supply chain, will need to incorporate validated traceability solutions into their operations. The G7 will determine and communicate standards that solution(s) will need to meet to qualify for G7 Certification.
These third-party traceability solutions will then communicate key data points, including provenance information, with a secure, independent Distributed Ledger.
To ensure the system is viable and credible, this information will be complemented by a physical check on rough diamonds, in Belgium. This check provides the G7 certificate, based on a high level of assurance, which will be carried onwards through the supply chain. This approach is needed to ensure that verification and certification is completed in a node where no Russian diamonds can be present given legal requirements that have been put in place.
Belgium is developing the details for the way this system will function. The G7 will coordinate with Belgium during this phase to ensure the system is functional and presents minimal additional costs and delays.
As noted, once this system is in place, tested, and perfected, the G7 will consider additional options and approaches beyond the central G7 import hub in Belgium.
We expect to implement mitigating measures for beneficiation (polishing in the mining country). Export of the polished, beneficiated goods to the G7 countries may be direct if appropriate measures are put in place to ensure non-contamination of Russian diamonds.
This system will provide traders, manufacturers, retailers and ultimately customers with the highest assurances of the non-Russian provenance of their diamonds in accordance with the G7 measures. Greater data intelligence and controls will also significantly enhance the overall levels of traceability in the diamond industry.

Source: DCLA