Russian diamond miner Alrosa will cut its production for 2025 and lay off staff as sanctions compound the financial impacts of weak demand for rough, according to media reports.
The global diamond industry is in “deep crisis,” with prices falling for the second consecutive year, Reuters quoted company CEO Pavel Marinychev as stating on a local Yakutia television station last week. The Ukrainian government’s Center for Anti-Misinformation repeated Marinychev’s comments, adding that the Alrosa head promised to “resume production immediately after the markets recover.” The miner will also reduce labor costs by 10% next year.
“Certain areas that are less profitable, which are at the borderline of profitability, may be subject to suspension during this crisis period,” Marinychev said, according to the Reuters article. “We are currently in a rather difficult situation. Our task is to endure and wait out this period, to wait for prices to start rising again.”
Meanwhile, Russian Deputy Finance Minister Alexey Moiseev noted that Gokhran, the state-owned gem and precious-metal repository, was prepared to buy a portion of Alrosa’s rough production.
“We must demonstrate to the market our confidence in the future of the diamonds’ enduring value, support the emerging trend of global trade recovery,” Moiseev said in a statement last week. “The State Fund of Precious Metals and Precious Stones of the Russian Federation has sufficient resources to provide support to the diamond industry if necessary, as was the case before. The federal budget for 2025-2027 provides for up to RUB 154.5 billion [$1.55 billion] for the purchase of precious metals and precious stones by Gokhran.”
Moiseev also lashed out at attempts to discuss Russian sanctions at the most recent Kimberley Process (KP) plenary, which took place from November 12 to 15, as well as the suggestion of a single node for rough-diamond certification in Antwerp.
“Despite yet another attempt by the aggressive minority of G7 [Group of Seven] countries to once again disrupt the work of the plenary session by politicizing its agenda, the KP has proven its effectiveness and ability to adapt to new realities in the interests of all KP participants and their national diamond industries,” he noted. “Attempts to split the ranks of the global majority and buy out its individual members with separate ‘bribes’ of imaginary benefits to the detriment of the common interests of the industry have failed. Responsible participants in the global diamond trade are well aware that any one-way concession to the offerings of ‘innovative’ digital and logistical ‘single-node’ monopolies that bypass and undermine the Kimberley Process Certification Scheme can only lead to the collapse of the whole industry [and the] loss of its sustainable development in favor of settling geopolitical scores by short-sighted liberal globalism in pursuit of neocolonial practices.”
Image: Rough diamonds. (Alrosa)
Join Rapaport’s exclusive WhatsApp channel for real-time news, analysis, and insights.
