Trafigura profit drops 62% after ‘massive problem’ in Mongolia
The Mongolia losses mean Jeremy Weir’s tenure as chief executive officer at one of the world’s largest commodity traders is ending on a sour note.
Russia’s Alrosa (MCX:ALRS), the world’s top diamond miner by output, has found a 17.4-carat bright yellow gem-quality precious rock at its new Verkhne-Munskoye deposit in Yakutia, which started operations in 2018.
The diamond, recovered in mid-February from the Zapolyarnaya kimberlite pipe, is the first large coloured stone found at the site, the company said.
Alrosa, which did not disclose the estimated value of the diamond, said it would be assessed and evaluated by its experts in coming days.
The 17.4-carat bright yellow gem-quality stone was unearthed at the Verkhne-Munskoye deposit
Diamond miners and traders have been hit hard in the past year by weak market conditions. These factors have taken a major toll on producers of small stones due to an oversupply in that segment.
De Beers reported Thursday its worst set of earnings since Anglo American (LON:AAL) acquired it in 2012.
The world’s No. 1 diamond miner by market cap said demand for rough diamonds from polishers and cutters was weak last year due to the impact of US-China trade tension and the closure of US retail outlets. Many companies in the so-called midstream are struggling to obtain financing, it said.
Alrosa believes the situation is about to change as it’s already seeing the first signs of stabilization in the sector.
Increasing demand for synthetic diamonds has also weighed on prices. Man-made diamonds require less investment than mining natural stones and can offer more attractive margins.
Industry consultant Bain & Co., however, believes that while glut that’s depressing the diamond market will probably be cleared early this year, it will take at least another 12 months for the market to fully recover.
“The industry’s first and strongest opportunity to rebalance and regain growth will be 2021,” said Bain in a report released in December, adding that supply could fall 8% that year.
