Yakutia will treat it with understanding if ALROSA suspends another operation in order to maintain production

This statement was made by Aisen Nikolaev, Head of the Republic of Sakha (Yakutia) in an interview with Interfax, which was published on Wednesday. Noting that Yakutia is interested in maintaining production and even more so in the company’s stability and social security of people, he said that “if it suddenly happens that some other operation needs to be suspended to preserve the rest of the company’s production, we, of course, will treat this with understanding”, but reiterated that there are no concrete decisions on this subject. In connection with the situation arising from the coronavirus pandemic, ALROSA recently announced a suspension of diamond production at the Aikhal and Zarya mines, which led to a partial personnel retrenchment.
Speaking on the restoration of the Mir mine and the construction of the Yubileiny mine, Aisen Nikolaev said that these projects are still only at the stage of study and consideration, and final decisions with deadlines for them have not yet been made in principle. “But in general, I think that this crisis will not become long-term and accordingly should not greatly affect the implementation of some key long-term projects,” he said.
According to Aisen Nikolaev, who is also the first deputy chairman of the ALROSA Supervisory Board, it is too early to talk about the company paying dividends for the first half of 2020. “This decision will need to be made on the basis of operational and financial results for the first 6 months, as well as the real state of the market at a time when dividends will be discussed,” he said.
In his interview, the head of Yakutia spoke about the proposal put forward by the republic to support ALROSA through the purchase of diamonds by Gokhran, within a one-time deal or by installments, recalling that this mechanism has already been tested in 2008-2009 and the state ultimately benefited from this operation, as the diamonds bought by Gokhran increased in value. “In our opinion, this is an effective (and as the history shows a profitable) measure that could help the company go through the crisis period minimizing potential losses and preserving market leadership,” Aisen Nikolaev emphasized, saying that the final decision on this issue is not yet accepted, but a constructive discussion is underway on this proposal.

Victoria Quiri, Correspondent of the European Bureau, Rough & Polished, Strasbourg