Some diamond mining companies became operationally unprofitable in the first half of the year amid encouraging statements about rough diamond prices bottoming out. Headwinds for the diamond market in 2025 included the US tariffs. But this same factor could have become one of the reasons for the locally strong diamond industry’s performance in the second quarter that is usually weaker due to seasonality because cutters and polishers, fearing the tariffs announced in early April, rushed to purchase rough diamonds to have time to sell their polished goods before a rapid deterioration in trade relations with the United States. In case of ALROSA, the good results of the second quarter can also be explained by the Gokhran (State Precious Metals and Gems Repository) factor. Nevertheless, the nature of this success does not allow relying on a negative trend reversal; in order to do that, the suppliers who have reduced their rough diamond output by 15% from 2021 to 2024, to 100 mn carats, will need to make new diamond production cuts.
ALROSA
ALROSA - sanctioned since the spring of 2022 - rarely discloses its diamond production figures and has never published its data on rough diamond prices. The statements made by the company’s top managers and the Kimberley Process’s (KP) statistics can help understand the volume of diamond production. According to Pavel Marinychev, CEO of ALROSA, the diamond production was down 5% year-on-year in 2024, to 33 mn carats. That said, Russia maintained its diamond production in 2024 at the level of the previous year - about 37.32 mn carats (32% of global diamond production), according to Kimberly Process’s figures. According to the company’s press release, the diamond production target is 29 mn carats in 2025, that is, the rough diamond output is expected to decline by 12% compared to 2024.
To reduce expenditures amid the protracted crisis in the diamond industry, ALROSA decided to optimize the least profitable assets. Since April of this year, the company has temporarily suspended its diamond mining at two placers in the Anabar River valley, and since June - at the Verkhne-Munskoye deposit (the Zapolyarny and Magnitny quarries). The share of these deposits in ALROSA’s total diamond output is less than 1 mn carats, or 3%. The deposits are being put to ‘hot conservation’ mode: ALROSA will continue to maintain the infrastructure of the facilities in full, which will allow the company to put them into operation quickly as the diamond market recovers.
ALROSA’s performance results for the first half of 2025 were mixed relative to market expectations. In terms of revenue and EBITDA, the results were better than expected, but operational and free cash flows were disappointing: that is, the company’s working capital increased in January-June again, and there were no significant sales of rough diamonds from its inventories, notes Akhmed Aliyev from T-Investments. The effect was mitigated by nonrecurrent revenue from the sale of ALROSA’s subsidiaries in Angola (primarily, its 41%-share in Catoca) totaling 34 bn rubles (15 bn from the sale itself, 19 bn from writing off provisions for undrawn dividends).
ALROSA's financial performance in the first half of 2025
Source: BCS
ALROSA’s revenue for the first half of 2025 declined by 25% year-on-year, which is due to the dynamics of average selling prices and the strengthening of the ruble, and is equal to 134.3 bn rubles. This coincided with the consensus forecast.
Interestingly, ALROSA’s revenues under IFRS in the second quarter were higher than in the usually more favorable first quarter - 68 bn rubles against 66 bn rubles in January-March 2025. The difference is even more striking when denominated in dollars, taking into account the strengthening of the ruble in the second quarter that peaked in June this year. Revenues under IFRS were $841 mn in the second quarter of 2025 against $711 mn in the first quarter of 2025 and $671 mn year on year.
At the same time, statistics on India’s imports of Russian-origin rough diamonds indicate a significant reduction in supplies. For example, rough diamond imports from Russia dropped by 45% year-on-year, to $262.3 mn, in the first five months of 2025, according to the Indian Ministry of Commerce and Industry’s report. It should be noted that these figures may not fully reflect real supplies of Russia’s rough diamonds, because after the introduction of sanctions by the G7 countries, some Russian-origin rough diamonds may be delivered to India as a transit supply from the UAE - such a mechanism is in place, as Martin Rapaport, Chairman of the Rapaport Group, stated.
According to the comments by diamond miners, rough diamond prices rose slightly in the second quarter, but not enough to cause an increase in sales amid the ongoing crisis. The mystery can be explained by the participation of Gokhran that may use half of the allotments allocated for Gokhran in the budget to purchase rough diamonds this year, according to Alexey Moiseyev, Deputy Finance Minister of the Russian Federation. In total, the Russian Federation allocated up to 154.5 bn rubles in 2025-2027 for Gokhran’s purchases of precious metals and precious stones. A specific range of diamonds was under discussion by ALROSA and Gokhran, Moiseev said in June.
ALROSA may sell part of its inventories estimated (as cost of production) at 115.8 bn rubles as of July 2025. Traditionally, diamond miners need to wait for demand to recover to sell rough diamonds from their inventories, but Gokhran may act proactively to support the company amid a protracted crisis in the diamond market.
ALROSA’s EBITDA in the first half of the year declined by 42% year-on-year, to 37.1 bn rubles, although it exceeded the consensus forecast by 10%. Alfa-Bank notes the growth in labor costs, as well as fuel and energy costs, typical of the diamond industry. Profitability dropped to 28% from 36% a year earlier.
The company’s net profit reached 40.6 bn rubles, up 11% due to a one-time effect from the disposal of assets. Without taking into account the one-time effect from the selling of Catoca and non-monetary items, the company’s net profit was just 7 bn rubles, which is 7 times lower than a year earlier, according to the Renaissance Capital’s calculations. The adjusted figure was 44% below the BCS’s expectation.
The money from selling Catoca had a positive effect on the operational cash flow, but pressure was exerted by the growing working capital and the effect of exchange rate differences. As a result, free cash flow left the negative zone, where it was six months ago, and amounted to 2.6 bn rubles, which is more than 10 times lower than a year ago (38 bn rubles). Taking into account the selling of the company’s share in Catoca and the related cash flows, the figure is 37.5 bn rubles.
Capital investments (23 bn rubles) were comparable to those in the same period last year.
Despite the crisis, ALROSA launched its project to restore the Mir underground mine (Mir Gluboky). ALROSA may also make an investment decision this year to build an underground mine at the Jubilee pipe. The Republic of Yakutia’s leaders insist on this, and their arguments in support of the implementation of the project are based on the need to maintain consistently high diamond production and preserve jobs. The Jubilee pipe is among ALROSA’s key deposits and it provided one fourth of the company’s total diamond production at its peak in 2013-2018, but its contribution decreased to 16% by 2021. Capital investments in the construction of the Jubilee mine were estimated at 72 bn rubles in 2019.
ALROSA’s net debt soared to 61 bn rubles from 6.3 bn rubles a year earlier. Net debt/EBITDA at the end of the half-year period was 1.18x, compared to 1.37x at the end of 2024 and 0.05x at the end of the first half of 2024.
ALROSA predicts that the difficult situation in the rough diamond market will persist in the short term as excess rough diamond inventories in the midstream and an imbalance between supply and demand will continue putting pressure on diamond prices and limit the sales potential, the report says.
De Beers
De Beers sold just $2.72 bn worth of rough diamonds in 2024, which is a multi-year low. Diamond production was adjusted by 22%, with the average price index down 22% year-on-year. EBITDA was negative in the second half and for the full year.
De Beers’ diamond production in the first-half of the year (10.214 mn carats) was down 23% compared to the same period in 2024. The company reduced its diamond production by 36% year-on-year, to 4.1 mn carats, in the second quarter. The decline reflected an ongoing response to a long period of sluggish demand for rough diamonds and high inventory levels in the midstream, the company explained. However, De Beers confirmed its guidance for this year in the range of 20 mn-23 mn carats.
At the end of the first half of the year, almost all De Beers assets declined, excluding Canada’s Gahcho Kué, where the figures reduced in a planned manner due to the transition to a lower-grade ore. The most serious decline (by 26%, to 7.2 mn carats, compared to a year ago) in the diamond production was in Botswana, where measures to reduce diamond production were taken at the largest mines - Jwaneng and Orapa. The company extended the care and maintenance phase of the Orapa mine in the Orapa area and mothballed the Letlhakane tailing dump. In Namibia, measures to reduce offshore diamond production are under implementation by Debmarine. The diamond production at the Venetia mine, South Africa, where an underground mine was launched in 2023, remains significantly below than in the open-pit mining phase.
De Beers’ revenue for the first half of the year decreased by 13% year-on-year, to $1.952 bn. Sales dropped by 8%, to 11 mn carats, although it outpaced the diamond production level. The revenue declined not very significantly as De Beers sold off rough diamonds, including some of its lower margin goods (the company calls this as ‘inventory rebalancing’). However, rough diamond sales at three sights held in the second quarter were 7.6 mn carats, down from 7.8 mn carats a year earlier, but revenue was 14% higher year-on-year due to sales of higher-end gemstones, and amounted to $1.185 bn, which is more than double the consolidated revenues of $520 mn in the first quarter of this year.
The consolidated average selling price for the first half of 2025 was down 5%, $155 per carat, with the 14% decline in the average rough diamond price index (excluding the impact of inventory rebalancing) partly offset by higher demand for higher-end diamonds, which impacted the sales mix in the second quarter of 2025.
De Beers’ performance in the first half of 2025
De Beers’ EBITDA was negative again in the first half of the year (minus $189 mn), compared to a positive $300 mn a year earlier. The negative figure was due to a lower price index and the inventory rebalancing resulted in selling certain assortments at a lower margin. However, cash flow was positive, the company explained, and expenditures ($87 per carat) remained almost at the level of 2024, as the impact of lower diamond production was offset by cost-cutting initiatives across its operations. De Beers first reported negative EBITDA in the second half of 2023 and has only recorded a positive figure once since then.
Capex declined by 35% year-on-year, to $172 mn, as De Beers switched to saving the money and took optimization actions. These include, among other things, the restructuring of the Venetia mine life extension project and the rationalizing of operational expenditures. “While a stabilisation of polished diamond prices in the first quarter of the year temporarily supported an improvement in industry sentiment, polished trading slowed again in the second quarter amid increased uncertainty surrounding US tariffs announced in April. … Demand in the US held steady year-to-date, though the full impact of the tariffs has yet to be seen. In India, leading retailers reported double-digit growth in the first quarter of the year. Meanwhile, the rate of decline in China appears to be slowing, while demand in Japan and Gulf remains robust,” the press release says.
Petra Diamonds
Petra that currently holds the world’s third-largest diamond reserves has faced operational challenges as it extends the life of mines and increases the diamond production at its veteran mines - Cullinan and Finsch - in South Africa.
Source: Petra Diamonds Annual Report 2024
At the beginning of 2023, Petra expected its diamond production to grow by FY2025 to 3.9 mn carats, but later adjusted its forecasts several times - first to 3.55 mn carats, then to 2.8 mn - 3.1 mn and finally, to 2.4 mn - 2.7 mn carats (the last figure did not take into account the sale of the Williamson mine in Tanzania in May 2025). As a result, diamond production was 2.43 mn carats, closer to the lower limit of the forecast (1% higher than a year ago, taking into account the Williamson mine).
Medium-term growth plans to 3.5 mn carats have also been postponed for more than 3 years, to 2028.
Petra Diamonds forecasts in January 2023
... and in June 2024
Petra Diamonds August 2025 Outlook Update - Another Cut to Expectations
Source: Petra Diamonds FY 2026 - 2030 Analyst Guidance and Supplementary Information
At the same time, there is a reduction in capital investments in expansion, that is, in unlocking the potential of ore bodies at the Cullinan and Finsch deposits. The current guidance for FY2026 has been adjusted to $83 mn-$90 mn from $101 mn-$110 mn planned in mid-2024.
After 2028, diamond production is expected to decline due to the depletion of currently available above-ground reserves. The Cullinan mine’s potential, taking into account the projects under implementation and those planned for implementation, will begin to decrease markedly after FY2036 and will finally dwindle away by FY2045. The Finsch mine is in a similar situation.
Petra’s revenue ($206 mn) in FY2025 was 33% below the FY2024 levels, even though the company held additional tenders to sell rough diamonds unsold in FY2023. Sales were down 18%, to 2.36 mn carats.
In April, Petra cancelled its latest tender for the Cullinan’s rough diamonds, responding to the uncertainty following the announcement of the US tariffs, and in June, it announced a shift to quarterly results. Rough diamond sales at the fifth and sixth tenders (April and June) were 29% higher than at the February one, and the average price was 4% higher ($86 per carat). However, comparable half-year sales prices were 16% lower than at the similar tenders last year, largely due to a lower-quality rough diamond mix from the Cullinan mine.
The sales at the seventh tender of the 2025 fiscal year (in June) were $21 mn compared to $29 mn in the same period of the previous calendar year, and the average price per carat dropped to $73 compared to $101 mn a year earlier. However, compared to the fifth and sixth tenders (April and June 2025), prices at the seventh tender were 3% higher, which allows the company to talk about some revival of the market. Prices for the rough diamonds from Cullinan, in particular, rose by 7%.
Petra’s net debt surged to $264 mn from $193 mn a year earlier. Amid capital expenditures and cash flow problems due to a decline in demand and lower prices for rough diamonds, the company is in dire need of debt refinancing that threatens again to put the diamond miner in need of restructuring. So far, creditors have been loyal to the company: in August, it received a deferment of repayment of a debt until 2029-2030, the company will pay off interest using funds from an additional issue of shares. Relatively recently, Petra was already undergoing a restructuring process in 2021, when the debt was converted into equity, but in 2024-2025, amid poor market conditions, it launched an optimization process within the company, when it sold its Williamson mine and is laying off employees now.
Burgundy Diamonds
Burgundy Diamonds Mines acquired the Ekati diamond deposit (Northwest Territories of Canada) from Dominion Diamonds in 2023 and positions itself as the largest diamond producer in the G7, controlling about 4% of global rough diamond supplies.
Until recently, mining was carried out at three projects within Ekati, including the depleting Sable open pit and the new Point Lake open pit, as well as the Misery underground mine. Another open pit mine, Fox, ceased diamond production in 2015, but it features high-grade ores to recover high-end rough diamonds and has a potential for underground mining. The ore reserves at Fox will be recovered until the end of 2028. Total reserves at the operating deposits are estimated at 15.8 mn carats, which provides the life of mine until 2028. The company also estimates Point Lake’s indicated resources at 24 mn carats.
Burgundy plans that the Sable and Misery mines will provide the bulk of diamond production until 2025, when ore from the Point Lake open pit will become the main source of rough diamonds for the processing plant. The ore from Point Lake open pit is intended to be a gateway to the future for Ekati, keeping the deposit operational while future projects are under development.
Burgundy’s plans include expanding the Misery mine, building mines at Sable and Fox, processing existing inventories at Fox, optimizing the Point Lake project, and implementing an underwater remote mining project. These efforts can extend the life of the Ekati mine until 2040.
Processing of the first batches of ore mined at Point Lake to estimate the value of rough diamonds started in May 2025. Despite the declared importance of this project, Burgundy had to suspend the development of the Point Lake deposit as early as July, recognizing it as unprofitable amid low rough diamond prices, as well as laying off some employees and reducing the number of contractors. The price of the rough diamonds recovered from the Point Lake open pit samples was significantly lower ($52 per carat) than from other mines of the company. With Point Lake open pit suspended, the processing plant has been operating for two weeks a month since August. Diamond mining can resume by mid-2026, depending on rough diamond prices.
The figures of the first quarter of 2025 were disappointing as the diamond production declined by 33% year-on-year, to 0.8 mn carats, due to the transfer of diamond mining operations from Sable to Point Lake and reduced recovery at Misery.
Source: Burgundy Diamonds Q12025 Results Investor Presentation
First-quarter revenue declined by 38%, to $73 mn, with sales down 11%, which the company attributes to the sale of a large quantity of low-end rough diamonds. EBITDA plummeted by 76%, to $6.4 mn.
In the second quarter, production remained unchanged from the previous period - 0.8 mn carats against 1.22 mn carats a year earlier, sales were 0.9 mn carats compared to 1.03 mn carats in the second quarter of 2024. The rough diamond price per carat declined further to $58 compared to $62 per carat in the first quarter and $103 per carat a year earlier, since 51% of all processed ore in this period came from the Point Lake pipe. EBITDA with such indicators went into negative zone, to minus $12 mn.
Burgundy’s capex surged in 2024 amid the implementation of the capacity expansion program (stripping at Point Lake, exploration drilling at Misery) - to $159 mn from $37 mn a year earlier. In 2026, the company expects to start the construction of an underground mine at the Fox pipe, the diamond production at which is expected to be launched in the second quarter of 2029. The company is currently exploring the potential for deeper diamond mining at Misery.
Net debt, including the inventories estimated, was $47.7 mn at the end of the first half of the year, up from $2.5 mn at the beginning of the year.
Sergey Bondarenko for Rough&Polished
