Image credit: kremlin.ru
On Monday, President of the Russian Federation Vladimir Putin held a working meeting with ALROSA CEO Sergei Ivanov, with whom he discussed the company's position in the global diamond market, the challenges it faces and its plans for the future.
According to the media communications of ALROSA, Vladimir Putin noted that amid the new coronavirus pandemic, the global jewelry industry and its base - the diamond mining industry - found themselves in a very difficult situation.
“ALROSA continues to be the world’s leader in diamond mining. Even in recent months, we have slightly increased our share, despite the crisis trends that you have identified. The company continues to develop, we are engaged in projects in the field of operational efficiency, production automation and Big Data, including a “digital mine” and a number of other projects that have been launched,” Ivanov told the President of the Russian Federation.
According to him, there are now signs of recovery in the market; over the past few weeks, ALROSA has sold more rough diamonds than in several months of the pandemic. The company expects fourth-quarter sales to be close to last year's figures.
The market crisis led to an unprecedented drop in ALROSA's sales in the second quarter. ALROSA had to take on the function of stabilizing the international diamond market and support diamond manufacturing factories, which found themselves in a rather difficult situation. In particular, the Kristall diamond manufacturing factory located in Smolensk was in a rather difficult financial situation; for a certain time, it was idle due to a drop in demand for polished diamonds. Recently, Kristall has resumed production. “We are sure that by the end of the year we will be able to operate at a good turnover and prepare for the holiday season and for the sale of jewelry,” Ivanov said.
The COVID-19 pandemic has made significant adjustments to the company's operations. Since March, ALROSA, together with the leadership of the Republic of Sakha (Yakutia) and federal agencies, has taken a number of comprehensive decisions to prevent the spread of coronavirus infection.
Speaking about infrastructure projects, the head of ALROSA separately noted the merits of the public-private partnership model, which was chosen several years ago for the construction of a new airport in the city of Mirny. ALROSA is also engaged in gasification of northern cities, primarily Udachny. This will make it possible to switch from expensive electricity to its own gas generation and increase the reliability of power supply and energy security of the northern regions.
The company’s press release also said that ALROSA and the Ministry of Finance were currently discussing a possible purchase of rough diamonds by Russia’s Gokhran, a state repository of valuables in order to further stabilize the social situation in the Republic of Sakha (Yakutia) and help its budget, for which ALROSA serves as a backbone company.
“In 2008, diamonds were purchased at sufficiently low prices due to the crisis that was at that time, and subsequently the State sold them on the restored market with a good profit. Exactly the same instrument is being discussed now. It would also be useful to remove a certain amount of diamonds from the market, where there may be an imbalance between production and consumption for some time,” the CEO of ALROSA said.
Alex Shishlo for Rough&Polished
