A lot has happened over the last couple of months for ALROSA, one of the biggest miners of diamonds in the world. They have taken a number of measures to safeguard the stakeholders’ and its own interests. One of which is cutting down production by almost 17 per cent for the year 2020. “In our view, the most important risk is associated with excess inventories accumulation and debt stockpiling along the pipeline, as those are pre-conditions for a price slump and an overall industry destabilization when collaterals and inventories lose their value.
That’s why ALROSA as well as other major diamond miners doesn’t push its clients to buying contracted volumes, sacrificing sales volumes and focusing on maintaining a stable price level, beneficial to the stability of the entire industry,” says Evgeny Agureev, Deputy CEO, ALROSA.
ALROSA has also stated that it is in a good position as far as liquidity goes and that it can go on without sales for the next couple of months. “At the beginning of this year, ALROSA had about 23 million carats of accumulated inventories of rough diamonds - this is about 9 months of production. In addition, it is obvious that the midstream also has inventories of rough and polished diamonds, and our rough sales won’t start with high numbers. In these conditions, the decision to reduce production is rational - this will allow both us and the midstream to get rid of inventories faster in the future and get out of the crisis,” he added.
The GJEPC urged members to do a voluntary ban on rough imports for 30 days last month. This decision was not welcomed by certain mining companies and Evgeny too believes that this is a move won’t be necessary. “Despite all the current challenges, the cooperation with India remains crucial for us, and for the whole “pipeline”, because about 90% of all diamonds come here for cutting. Under current circumstances we will endorse any initiative that supports the midstream and helps to balance supplies. However, I would like to note that such initiatives are reasonable only if they are not a total restrictive measures, but a recommendation that individual companies may or may not accept depending on their needs.”
For ALROSA’s take on lab-grown diamonds, DPA’s recent move to rebrand itself and more, watch the interview!