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

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

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

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.”

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

G7 bans Russian diamonds from January in show of solidarity to Zelensky

The Group of Seven (G7) nations will ban direct imports of Russian diamonds starting next year as a punitive measure against Moscow’s invasion of Ukraine.

There will be phased-in restrictions on indirect imports of Russian gems from March, a joint statement on Wednesday after the G7 nations’ meeting said. The measures were announced as Joe Biden and leaders of the G7 countries met Volodymyr Zelensky virtually in a show of solidarity.

The new measures will ensure a ban on non-industrial diamonds from Russia by 1 January and on third-party nations which sell Russian diamonds from March.

The move was being mulled as a part of fresh sanctions by the European Union last month. The G7 will phase in restrictions on indirect imports from a targeted date of March and introduce a “robust traceability-based verification and certification” mechanism for rough diamonds within the G7 by 1 September 2024. The ban excludes diamonds for industrial use.

Russia is the biggest producer of rough diamonds, which are taken from swathes of mines beneath the Siberian permafrost. The trade of precious rock has helped Russia stop from bleeding under economic sanctions after the invasion of Ukraine in February last year.

Source: DCLA

Alrosa says mines largest gem-quality diamond in Russia in a decade

Sanctions-hit Alrosa, the world’s biggest diamond-producing company, said on Sunday it has mined the largest gem-quality diamond in Russia in the past decade.

The 390.7-carat diamond was mined at one of the company’s mines in the Republic of Sakha, Alrosa said in a statement. The region, commonly known as Yakutia, lies in Russia’s Far East along the Arctic Ocean.

“The found diamond is a light crystal of an irregular shape, bordered by a yellow-brown halo – a combination of mass, shape and colour that is unique today,” Alrosa said.

The company mined the largest gem-quality diamond in Russia in 2013, weighing 401 carats, Alrosa said.

The world’s largest gem-quality diamond ever mined – the 3,106-carat Cullinan stone – was recovered in South Africa in 1905.

Alrosa was last year placed under sanctions by the United States, which cut it off from its banking system and banned direct sales to the US market after Russia invaded Ukraine.

Last month the company reported a rise of 0.2% in revenue for the first half of the year but said net profit fell 35% year-on-year to 55.6 billion roubles.

Source: DCLA

Alrosa Finds 2 Huge Diamonds at Udachnaya on the Same Day

Two large high-quality diamonds – each larger than 50 carats – were unearthed in Yakutia on December 2, 2022, Bankers Day, “when Russian bankers celebrated their professional holiday,” according to Rough & Polished.

The two stones were extracted at Processing Plant No. 12 from the ore mined at the Udachnaya diamond pipe. One weighs over 67 carats, while the second diamond, a type IIa, weighs more than 52 carats,

Dmitry Amelkin, Alrosa’s Strategy Director, commented: “Finding two of these rare gem-quality diamonds on one and the same day is a unique coincidence. It is symbolic that this happened precisely on the Udachnaya diamond pipe, which has been accompanied by good luck since its discovery 

Credit: Alrosa

Alrosa CEO Sergey Ivanov Reportedly Leaving

  

                            Sergey Ivanov 

Alrosa CEO Sergey Ivanov is stepping down from the position, a Russian news outlet reported.

The executive has decided to resign before the termination of his contract, according to a Google-translated version of an RBC article. He might move into a role at Volga Group, which controls gas and petrochemicals assets, the report added, citing an unnamed source.

An Alrosa spokesperson declined to comment to Rapaport News on Sunday.

Ivanov joined the Russian diamond miner in the top job in 2017, succeeding Andrey Zharkov. Earlier this year, the US named Ivanov as a sanctioned person following Russia’s invasion of Ukraine.

Source: DCLA