Alrosa Russian Diamond Miner – Page 2 – The Diamond Certification Laboratory of Australia (DCLA)

Diamond Importers Might Have to Declare Russian Origin

G7 countries could oblige companies to affirm that their imported polished diamonds are not of Russian provenance, according to the US’s top sanctions official.

Leaders of the bloc will meet at a summit in mid-May and are looking to have a plan in place by then, according to a member alert the Jewelers Vigilance Committee (JVC) released Tuesday summarizing remarks by Ambassador James O’Brien, who heads the US’s Office of Sanctions Coordination.

“There could be a required declaration that finished diamonds imported to the US and other G7 markets were not originally mined in Russia or other kinds of restrictions that apply to polished diamonds,” O’Brien said, according to the note. “The aim is to ensure this is phased in at a time and flow that will accommodate the work of the industry.”

O’Brien made his comments at last week’s annual JVC luncheon, where he was the guest speaker. The summary contained a mix of direct and paraphrased quotes, wrote JVC president and general counsel Tiffany Stevens.

The G7 includes the US, as well as Canada, France, Germany, Italy, Japan and the UK. The European Union is known as its “eighth member.”

Alrosa, in which the Kremlin holds a stake, “is deeply rooted to the power structure within Russia, and our government wants to make sure its revenue is not available for them to raid,” O’Brien explained. The state is seeking sources of funds to keep the war in Ukraine going, he added.

Important issues to tackle include how long to wait for Russian diamonds that are currently in the market to exit the system, the sizes of stones to which sanctions would apply, and how enforcement will work, the ambassador pointed out. “Having thoughts on these questions that can contribute to a framework in time for the mid-May meeting is a goal of the US government,” he said.

He also said that the US wanted to make sure Burma — also known as Myanmar — didn’t help Russia. The Asian country has been subject to various US sanctions since a military takeover in 2021.

“Russia is going to its allies and asking them to give back military equipment,” the official said, according to the JVC summary. “Burma supports Russia, so the government also wants to make sure Burma is restricted in its sources of revenue, so it doesn’t help Russia as well. This includes ensuring the regime does not earn money from the sale of rubies and other gemstones.”

Source: Diamonds.net

US, EU engage diamond industry on Russian diamonds

State Department and European Commission Engage Diamond Industry to Discuss Next Steps on Russian Diamonds

Today, Ambassador James O’Brien joined Deputy Director General and Chief Trade Enforcement Officer Denis Redonnet of the European Commission to discuss with the U.S. and European offices of leading diamond retailers, manufacturers, laboratories, and industry trade associations the importance of the diamond industry’s engagement on future Russia-related import measures, including on polished diamonds, as noted in the recent G7 Leaders’ Statement.

Russia continues to earn billions of dollars from the diamond trade, and the discussion centered on the most effective and impactful ways to disrupt that revenue stream.

The United States and European Union remain committed to imposing economic consequences on Russia for its unprovoked war in Ukraine.

Source: state.gov

Alrosa Finds 2 Huge Diamonds at Udachnaya on the Same Day

Two large high-quality diamonds – each larger than 50 carats – were unearthed in Yakutia on December 2, 2022, Bankers Day, “when Russian bankers celebrated their professional holiday,” according to Rough & Polished.

The two stones were extracted at Processing Plant No. 12 from the ore mined at the Udachnaya diamond pipe. One weighs over 67 carats, while the second diamond, a type IIa, weighs more than 52 carats,

Dmitry Amelkin, Alrosa’s Strategy Director, commented: “Finding two of these rare gem-quality diamonds on one and the same day is a unique coincidence. It is symbolic that this happened precisely on the Udachnaya diamond pipe, which has been accompanied by good luck since its discovery.

Credit: Alrosa

De Beers Cautious Following Sales Jump

De Beers’ revenue rose 24% in the first half of 2022, but the miner gave a more somber outlook for the rest of the year.

“We can only have strong rough sales if that’s also coupled by what’s going on on the polished side,” De Beers chief financial officer Sarah Kuijlaars told Rapaport News on Thursday. “The polished position was very strong in the beginning of the year, but it has leveled off. We have much more caution about the next six months than we’ve had for the previous six months.”

Revenue jumped to $3.6 billion in the first half as strong consumer spending during the 2021 holiday season led to intense restocking in early 2022, parent company Anglo American reported the same day. Underlying earnings gained 84% to $491 million.

Rough sales grew 27% to $3.3 billion from five sights during the period. The remaining revenue relates to other businesses such as the company’s consumer brands and industrial-diamond business.

The miner’s rough-price index, which measures like-for-like prices, rose 28% compared with the same period of 2021. The average selling price for rough surged 58% to $213 per carat, reflecting the market upturn and a shift in the product mix to higher-value goods. Sales volume fell 20% to 15.3 million carats.

The higher average price resulted from the introduction of the new Benguela Gem mining vessel off the Namibian coast, which enabled the extraction of more lucrative stones, Kuijlaars explained. In addition, production at the Venetia deposit in South Africa was focused on the final cut of the open-pit mine, which has a relatively high grade — the number of carats per tonne of ore — and high quality, the executive added.

De Beers’ results painted a complex picture of the market. Last week, the company raised its production plan for the full year in response to strong demand, predicting output of 32 million to 34 million carats. It also noted that the sanctions and boycotts targeting Russian diamonds, as well as growing interest in provenance initiatives, would “underpin” demand for its goods. The sixth sales cycle of the year, which took place earlier this month, brought in proceeds of $630 million — 23% higher than for the equivalent period a year ago.

However, inflation in the US and lockdowns in China have created concerns across the industry.

“This time last year, our operation was coming out of Covid-19 [during which output slumped],” Kuijlaars pointed out. “To stabilize our production has been really important, and that strong production gives us confidence for the full year. That’s our part in delivering reliable supply. As we sell that through, we are very alert to signs of any slowdown in the remaining four sights of the year.”

Source: Diamonds.net

Russia hits back at attempts to ‘politicise’ its diamonds

ussia condemned what it called a push to “politicise” its diamonds over the conflict in Ukraine and said attempts to question its compliance with the international diamond certification scheme were “totally unfounded” and “far-fetched”.

The Kimberley Process, a coalition of governments, the diamond industry and civil society responsible for certifying diamonds as conflict-free, is split over a push by Ukraine and others to expand its definition of conflict diamonds to include those funding aggression by states.

The KP Civil Society Coalition (CSC) and some member states sought to discuss whether Russia’s diamonds were helping to fund the war in Ukraine during a KP meeting in Botswana last week.

“The Russian Federation absolutely condemns the orchestrated attempts of CSC, backed by absolute minority of some Western participants, to politicize the work of the Kimberley Process by deliberately distorting or even openly replacing its basic principles,” Russia’s finance ministry said in an emailed statement. It did not specify which principles it felt were being distorted or replaced.

The CSC did not immediately respond to an emailed request for comment.

The KP defines conflict diamonds as those that fund rebel movements seeking to overthrow legitimate governments, a narrow definition that many have sought to widen since the KP was founded in 2003.

Russia, which was KP chair last year, has “championed” work on revising the definition of conflict diamonds for the past five years, the finance ministry said, and it is committed to continuing talks on the definition.

“We therefore call on our opponents to refrain from further speculative accusations, abstain from political demagoguery and concentrate on the substantive work of the KP,” the finance ministry said.

The KP makes all decisions by consensus and the rift over Russia and Ukraine could jeopardise its effectiveness.

Source: miningweekly

China backs Russia in opposing bid to redefine conflict diamonds

China has joined Russia in opposing an effort to redefine conflict diamonds to include those sold by individual nations, as a rift between Western and pro-Russia nations jeopardizes the process for certifying rough diamonds as conflict-free.

Ukraine, Australia, Britain, Canada, the European Union, the United States and civil society groups were pushing to place Russia on the agenda at this week’s Kimberley Process (KP) meeting in Botswana and to broaden the KP’s definition, under which only gems funding rebel movements are “conflict diamonds”.

Russia, the world’s biggest producer of diamonds, has said the situation in Ukraine has “no implications” for the Kimberley Process.

China agrees that the Ukraine issue falls outside the scope of the KP, the country representative told the meeting, according to three sources. China joins Belarus, Central African Republic, Kyrgyzstan and Mali in backing Russia’s stance within the body, which seems unlikely to come to any agreement.

“It’s clear that this is posing really an existential crisis for the Kimberley Process,” said Hans Merket, a researcher at Belgian non-governmental organisation IPIS, who is a member of the civil society group.

“It has become impossible to even discuss the KP’s problems and shortcomings, let alone that there would be any room for convergence on how they can be addressed.”

China’s KP representatives did not respond to an emailed request for comment.

The KP certification scheme, designed to eliminate the trade in so-called “blood diamonds”, was set up in 2003 after devastating civil wars in Angola, Sierra Leone, and Liberia, which were largely financed by the illicit diamond trade.

The Kimberley Process Civil Society Coalition and some member states have been arguing to broaden that definition for years, but it is difficult to do as the KP makes decisions by consensus.

Jacob Thamage of Botswana, the current KP chair, said that more participants now believe reform is needed.

Source: mining.com

Botswana sees Russian diamond ban opening door to synthetic gems

*Mirny, Sakha Republic, Russian Rough Dimaonds*

Botswana, Africa’s top diamond producer, sees a prolonged ban on Russian diamonds opening the way for synthetic gems to expand market share, the country’s minister told a mining conference on Monday.

The United States, the world’s largest market for natural diamonds, imposed sanctions on Russia’s state-controlled Alrosa in April, aiming to cut off a source of revenue for Moscow after its February invasion of Ukraine.

Alrosa, the world’s largest producer of rough diamonds, accounted for about 30% of global output in 2021.

Botswana’s Minister of Minerals and Energy Lefoko Moagi said the ban on Russia diamonds might push prices up to the benefit of rival producers but he also said the gap would be hard to fill.

“We see the 30% gap that will be left by the ban being plugged by something else that is not natural. And for us that will be a challenge,” he said.

Jacob Thamage, head of Botswana’s Diamond Hub, said uncertainty over the Ukraine conflict makes it difficult for Botswana and other natural diamond miners to fill the supply gap as ramping up operations requires significant investment.

“You don’t want to invest a lot of money to up-scale and then the war ends the next day,” Thamage said. “We also see the higher prices pushing consumers to substitutes such as the synthetics and this can cause problems for us if we cede the market to unnatural stones.”

Sales at Debswana, a joint venture between Anglo American unit De Beers and Botswana’s government, accounts for almost all of Botswana diamonds exports. These stood at $3.466 billion in 2021 compared with $2.120 billion in 2020.

Thamage also fears that consumers might start to shun natural diamonds due to traceability issues.

“There is an increased fear that buyers of diamonds will begin to treat all natural diamonds as conflict diamonds and therefore shift to unnatural diamonds,” he said.

Source: mining.com

Russia says it may buy diamonds from sanctions-hit Alrosa

Russia may buy an as yet undetermined amount of rough diamonds from sanctions-hit producer Alrosa through its state precious metals and gems repository Gokhran, the country’s Finance Minister Anton Siluanov said on Wednesday.

The United States imposed sanctions on state-controlled Alrosa in April, complicating the Russian company’s operations in the global diamond market, with the aim of cutting off a source of revenue for Russia.

“We do not rule out the possibility of Gokhran purchasing diamonds produced by Alrosa. The amount will be determined later,” Siluanov told reporters.

Gokhran is generally more focused on purchases of precious metals from Russian domestic producers than diamonds, he added.

Alrosa, the world’s largest producer of rough diamonds, was behind about 30% of global output in 2021 and competes with Anglo American unit De Beers.

Its sales, mainly to Belgium, India and the United Arab Emirates, totalled $4.2 billion in 2021.

Gokhran bought diamonds worth $1 billion from Alrosa during years of weak demand caused by the global financial crisis.

Source: Reuters

Alrosa roughs are not ‘conflict diamonds’, says India

Exports of rough diamonds from Russia’s state-owned Alrosa mines have resumed to India, although tensions remain high over such consignments.

Many Western nations are seeking to shut down Russia’s diamond trade with India by calling Russian diamonds conflict diamonds, or blood diamonds.

Critics such as Cristina Villegas, director of the Mines to Markets program at Pact, a development NGO, was quoted by the India-phobic London based Guardian as saying: “These are objectively conflict diamonds: they’re funding an armed conflict against a peaceful neighbour, by a state actor.” Villegas was silent about the flood of cash going to Russia by oil and gas purchases from European countries.

Source: rough-polished.com

World’s top diamond miner Alrosa hit by US sanctions

Alrosa, the world’s top diamond producer by output, has been hit by fresh sanctions imposed by the US Department of the Treasury’s Office of Foreign Assets Control (OFAC).

The OFAC announced late on Thursday it had placed Alrosa on the Specially Designated Nationals (SDN) list, which effectively kicks a sanctioned company out of the US banking system and bans its trade with Americans.

The measure against the Russian state-owned diamond miner seeks to cut off additional sources of revenue for Moscow, the government agency said.

It also affects any entities in which Alrosa has a 50% interest or more, either directly or indirectly.

The company’s customers well as other counterparties must stop all dealings with the state-controlled Russian miner by May 7, Treasury said.

Shares in the company collapsed on the news, closing nearly 13% lower on Friday trading in Moscow.

Alrosa and its chief executive Sergei S. Ivanov were included in the first wave of restrictions announced by Washington, which restricted the company’s ability to raise new debt and equity in the US.

“These actions, taken with the Department of State and in coordination with our allies and partners, reflect our continued effort to restrict the Kremlin’s access to assets, resources, and sectors of the economy that are essential to supplying and financing Putin’s brutality,” Treasury said in the statement.

The European Union and the UK have also imposed sanctions on the miner following Russia’s invasion of Ukraine.

Diamonds are one of Russia’s top ten non-energy exports by value, with exports in 2021 totalling over $4.5 billion, it noted.

Alrosa is responsible for 90% of Russia’s diamond output and 28% of global supply, with 32.4 million carats produced in 2021 and sales topping $4 billion thanks mainly to consumer demand from the US.

Loopholes
Experts have noted the sanctions against the miner carry a significant loophole. Russia’s rough diamonds are sent to another country — usually India — where they are polished and cut, which makes them the product of that nation in the global market.

Another issue is that diamonds of various origins are often mixed once polished, which can make it more difficult for companies that independently vow to stop buying Russian goods.

The Responsible Jewellery Council (RJC), the leading standards organization of the global jewellery and watch industry, took steps into that direction in early April and suspended Alrosa’s membership.

“Fundamentally, we remain focused on RJC’s purpose, which is to ensure all jewellery is responsibly sourced,” the group’s char David Bouffard said in the statement.

World’s top diamond miner Alrosa hit by US sanctions
The main markets for Alrosa, which employs about 32,000 people, are the US and Asia (Photo: Dmitry Amelkin, Transformation Director of Alrosa’s Polishing Division. Courtesy of Alrosa | Twitter. )
US-based jewellers Tiffany & Co. and Signet Jewelers said in March they would no longer buy new diamonds mined in Russia.

Alrosa withdrew in March from the Natural Diamond Council (NDC), a market alliance of the world’s leading producers of precious stones. By doing so, the company not only stepped down from the board, but it also cut all financial contributions.

The Mirny, Sakha-based miner also has a 41% stake in Angolan diamond production firm Catoca, which is not affected by the latest US sanctions given the OFAC.

While the full effects of the sanctions on the already undersupplied global rough diamonds market are not yet clear, the Antwerp World Diamond Centre (AWDC) has said there was a chance the restrictions could prove counterproductive.

“It is a blow that should hurt Russia but there is a chance that we do more damage to ourselves,” spokesman Tom Neys told Belgian newspaper Gazet van Antwerpen. “The Russians can easily trade their diamonds with non-EU countries and outside the US.”

The diamond jewelry industry is going into the year with diamond supply at historically low levels, estimated by Bain & Company at 29 million carats in 2021. “Upstream inventories declined ~40%, driven by high demand and slow production recovery, and are near the minimal technical level,”

Source: mining.com