Alrosa Sees Diamond Resurgence

The diamonds market may revive by September, Alrosa president Sergei Vybornov said Wednesday on the sidelines of the Troika Dialog investment conference.

Alrosa, the state diamond monopoly, has halted sales to private clients because of lower prices and is currently selling only to the state depository, Gokhran.

“We would like them to buy up to 50 percent of our annual production this year,” Vybornov said, adding that he also hoped to begin selling to private individuals in the Middle East who would buy the diamonds as an investment.

Vybornov said he had already found buyers for Alrosa’s hydrocarbon and iron ore deposits, although he declined to elaborate.

He also said Alrosa was ready to sell its 45 percent stake of KIT Finance to Russian Railways. The companies both took 45 percent stakes in the bank for a nominal sum in October after it began facing financing problems.

Vybornov told a panel that the value of the diamonds held by traders and polishers was estimated to be as much as $30 billion, or three times the annual world diamond trade of $10 billion.

One of the biggest problems in the industry, he said, is that middlemen use gems as collateral at several banks at the same time. “We see situations where traders are facing several margin calls on the same gems.”

The Moscow Times

Leave your comments.

In order to leave comments, please receive authorization on the site.