October 17, 2014

RUSSIA: Russian State-Controlled Diamond Mining Company, The ALROSA Group, To Commence Largest Diamond Mine In Russia. Alrosa World’s Largest Diamond Producer Having Surpassed De Beers In 2011.

Mining Global News
written by Robert Spence
June 29, 2014

Russia’s largest diamond miner, the ALROSA Group, is set to begin underground operations at its Udachny project in northeast Russia. The project is expected to produce the country’s largest diamond mine.

The Russian state-controlled diamond mining company plans to begin commercial production from the beneath-the-surface kimberlite pipe, which is projected to generate over five million carats of diamonds per year. ALROSA said the underground mining will begin in parallel to the open-pit mine until next year, aiming to produce between 2.4 to 3 million tons of ore per year by 2016.

"An ambitious program for the construction of underground mines is an integral part of ALROSA's development strategy aiming to keep its world's leading position in terms of rough diamond mining and ensure the diamond mining growth up to over 40 million carats. Launch of the Udachny underground mine will allow the Company to maintain stable volumes of diamond production in Western Yakutia for many years," said Alrosa CEO Fyodor Andreev at the official commissioning ceremony.

The Udachny mine has produced approximately $80 billion from precious gems since its 1955 discovery. The mine site, which means “lucky”, has become one of Russia’s major diamond-mining centers in recent years.

In addition to the mine, ALROSA operates the International and Aikhal underground mines. The company’s main processing facilities are in Western Yakutia and the Arkhangelsk region, as well as in Africa – in Angola and Botswana.

The ALROSA Group is currently developing 22 deposits and accounts for over a third of the world’s diamonds. The company is known for owning and operating the former Mir diamond mine, which closed down in 2001.

The Mining Weekly
written by Martin Creamer
August 11, 2014

JOHANNESBURG – While De Beers remains the world’s largest producer of diamonds by value, Russian diamond mining company Alrosa is now the world’s biggest producer by volume, which elevates its importance significantly.

Current economic sanctions against Russia do not extend to diamonds and although there are reports of broader and deeper sanctions being considered, the sanctioning of diamond supply from Russia is not on any current agenda.

“At this stage, nothing is happening to stop diamonds coming out of Russia and let’s hope the situation does not escalate where additional sanctions are imposed.

“It would be an absolute loss to the industry if Russia were not allowed to sell its goods freely,” Ernie Blom, who is serving his third term as president of the World Federation of Diamond Bourses, comments to Mining Weekly Online in the attached video interview.

The US government’s sanctions against Zimbabwe continue to inhibit dollar-based diamond sales from that country, but with European Union sanctions against Zimbabwe lifted, Belgium is now aggressively trying to reverse its loss of market share from the Zimbabwean sanctions, by holding quite a few rough Zimbabwean diamond tenders in Antwerp.

“They’ve seen the need and they’re starting to address it,” says Blom.

The 25 000-member world federation that Blom heads has 30 exchanges in 28 countries and 95% of all the world’s rough and polished diamonds go through these exchanges.

In South Africa, Blom would like to see the government and the cutting-and-polishing industry join hands to halt the industry’s significant decline.

During its diamond heyday, South Africa had 4 500 polishers, a number that has since fallen to fewer than 600.

“There has to be a partnership between government and industry to reverse the trend and start to build up the diamonds industry again,” says Blom, who points out that South Africa’s neighbours to the north and west and other countries have growing diamond industries.

“We can do the same, provided we work,” he reiterates, pointing out that the State Diamond Trader is working under difficult legislative circumstances in having to buy run-of-mine diamonds and sell them to beneficiators who have difficulty in viably polishing cheaper end goods.

By the same token, he is not sure that the mining companies would be happy if legislation were changed and they were forced to sell the cream of their production to the State Diamond Trader and be left with lower-end production.

He sees it as a conundrum that government, the industry and mining houses have to work out together if South Africa is to gain a bigger share of the global diamond-polishing market, which is currently very buoyant.

There has been phenomenal year-on-year growth, driven by the new emerging markets of China and India supplementing the American market plus increased strength in the European market.

“The industry has a fantastic growth potential,” he tells Mining Weekly Online.

Neighbouring Botswana, in creating facilities that are as good if not better than London’s, has customers attending sights every five weeks, which has put Botswana on the map, increased tourism and assisted the country to become a regional hub.

While the federation does not see synthetic diamonds as a threat to the natural diamond industry, its biggest concern is the passing off of synthetic diamonds as natural diamonds. To counter this, it has rolled out machinery and tools that are able to check the authenticity of each and every diamond.

Because diamonds can also lend themselves to money laundering, the federation is putting systems in place to ensure that the concealment of the origins of illegally obtained money cannot be part of the legitimate diamonds trade.

The federation’s system of warranties in 2000 was a forerunner to the Kimberley Process, which Blom says has reduced the sale of conflict diamonds to less than a tenth of a per cent, from being 4% of global turnover prior to its introduction under United Nations auspices.
[Photo: Diamond Production Map]
GeoCurrents
written by Martin W. Lewis
May 4, 2012

Rio Tinto, the British-Australian mining giant, recently announced that it would begin investing in Russian diamond extraction, forming a partnership with the Russian firm Alrosa. Alrosa, 90 percent of which is owned by the Russian government, is now the world’s largest diamond miner, having surpassed De Beers in 2011. Rio Tinto’s diamond ventures are also rapidly growing. In Russia, the firm is mostly interested in the Lomonosov deposit, located in Arkhangelsk Oblast in northern European Russia. Most Russian diamond mining, however, takes places in Yakutia (Sakha), in north-central Siberia.

The diamond business is currently surging, due in part to rapidly growing demand from China. Production has traditionally been concentrated in southern Africa, with Botswana occupying the highest position as recently as several years ago. Russia, however, is now the world’s top diamond producer, both in terms of quantity and value. Solid information on global diamond mining, however, is difficult to obtain, as different sources give different rankings.

Over ninety percent of the world’s extracted diamonds are sent to India for rough processing. Russian diamonds are currently exported to India through a variety of intermediary channels. Russia and India, however, are now negotiating for the direct export of rough stones from the diamond fields of Yakutia and Arkhangelsk to the cutting floors of Surat in Gujarat state.

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