The Republic of Yakutia, which is one of the largest shareholders of ALROSA, has proposed to sell rough diamonds worth $ 1.7 billion mined by ALROSA to Gokhran, according to Finmarket citing a source familiar with this issue.
This amount reportedly makes up almost 50% of the company's annual revenue. In 2019, the company sold diamonds worth $ 3.34 billion.
Image credit: ALROSA
Before the Covid-19 crisis the head of Yakutia, Aisen Nikolaev, suggested that Gokhran should buy rough diamonds worth between $ 500 million and $ 1 billion, which is about a quarter of ALROSA’s annual production.
The current proposal was sent last month and is now pending at the Ministry of Finance.
Gokhran had previously acted as an instrument of support during the crisis, when in 2008 Gokhran bought ALROSA’s rough diamonds worth $1 billion, which was then sold with good profit.
The company said its sales of rough and polished diamonds amounted to $ 152.8 million in March 2020, down 59.5% vs March 2019 ($ 377.1 million). ALROSA earned $ 148.7 million from rough sales (against $ 369.2 million last year) and $ 4.1 million from polished sales (against $ 8.0 million last year).
Totally, the diamond miner raked in $ 904.2 million from sales in the first quarter of 2020 against $ 1.004 million in 2019 (a decrease of 10%). ALROSA also announced that it had terminated long-term contracts with some of its customers.
Victoria Quiri, Correspondent of the European Bureau, Rough & Polished, Strasbourg
