Classification of Diamond Mining Companies in Russia

In Russia, the first diamond was found in 1829 in the Krestovozdvizhensky Gold Field located in the Perm Province in the Urals. Some time later there were discovered river placers containing small amounts of diamonds. The first diamond in Siberia was found near Yenissejsk in 1897 in the Melnichnaya River and the first diamond in Yakutia was found in 1949 in the Vilyui River basin. The Russian breakthrough into the team of diamond mining countries happened in the middle of the last century and was connected with the discovery and development of Yakut kimberlite pipes. For more than 50 years, there were prospected scores of diamond deposits which turned Russia into one of the leading diamond mining countries.

In the Soviet time, diamond mining was monopolized by the state and actually diamond mining was performed by the Yakutalmaz Production and Scientific Amalgamation in Yakutia and by the Uralalmaz Mine in the Urals. The situation drastically changed after this country passed to market reforms. Currently, already six Russian companies are engaged in diamond mining and taking into account those operating in Angola their number will be eight (Table 1). Five of them, except OAO Nizhne-Lenskoye and ZAO Uralalmaz, are subsidiaries dependent on ZAO AK ALROSA.
Table 1
Diamond mining companies of Russia
 

This classification was done by the author.
The above table shows that companies engaged in developing primary deposits (diamond pipes) are more productive and rated in the medium and large classes. Although mining diamonds from alluvial deposits requires fewer expenses, they are developed by minor, small-size companies. Taking into account that mining and extracting diamonds from ores requires more pay-back investments, it is necessary to extract more diamonds to make the development of ore deposits profitable and accordingly to process more diamond containing material. Since diamond pipes go down to a great depth (up to one kilometer and more), the cost in the process of their development is increased. Still greater expenses are connected with underground diamond mining and these may be carried only by a very large company (or groups of companies). In Russia, this is ALROSA headed by its leading enterprise – ZAO AK ALROSA.

Practical activity shows that small-size diamond mining companies are highly efficient in developing alluvial deposits. Yakut companies OAO Almazy Anabara and OAO Nizhne-Lenskoye in the process of their development and diversification are moving into the class of medium-size companies and they have to expand their raw materials base by way of prospecting or purchasing new alluvial deposits. OAO ALROSA-Nyurba while completing the development of its pipes is faced with switching over to underground mining, for which it will need significant financial resources. Since it belongs to the ALROSA Group, this will facilitate a successful solution of the problem. The same is true about OAO Severalmaz.

Lately, the general depletion of minerals in deposits under development resulted in world diamond shortage and its replenishment is possible only by way of prospecting and developing new diamond deposits in Russia along with establishing new or attracting small diamond mining companies. Thus, in 2007 Siberian Diamonds Limited (SDL), a private exploration and prospecting company, started an exploration program in the Irkutsk Region. This is the only company engaged in geological exploration for diamonds in Siberia. Another private company, ZAO Minas-Iraklion, having completed exploration and prospecting for diamonds in the Akhmerovsky Site in the Beloretsk District of Bashkortostan (South Urals) discovered a new genetic type of primary deposits – tuffisits. By 2010, the company intends to accomplish an investment project for industrial-scale diamond mining. Altogether, in the Russian Federation besides already discovered and being developed areas there are many new ones (in the northern part of the Irkutsk Region, the eastern part of the Krasnoyarsk Territory, Western Yakutia – the Siberian Diamond Province, according to the author’s terminology), where it is possible to open new large primary deposits. All the territory embracing the Siberian Diamond Province by a wide arch is promising in terms of discovery of alluvial and other types of diamond deposits. Small diamond mining companies could take an active part in exploring and developing these deposits along with large companies.
Thus, the classification of diamond mining companies introduced in this article may have not only theoretical, but also practical significance for the future.
Yu. Danilov, Acting Chief of Economics Department
Mining Complex of Federal State Scientific Entity “IRES”