Russia to continue buying diamonds through state fund in 2025
The Russian budget for 2025-2027 has set aside $1.55 billion for the purchase of precious metals and gems.
Russian diamond miner Alrosa may suspend some production in 2025 and cut staff as it faces challenges with low global prices, according to CEO Pavel Marinychev.
The world’s largest producer of rough diamonds by volume has been impacted by a ban on Russian diamond sales to G7 and EU countries as part of Western sanctions. These countries have agreed to ban direct imports of Russian diamonds starting January 1 and to phase in a full ban on Russian-origin stones via third countries beginning March 1, in response to Moscow’s actions in Ukraine.
Marinychev, who was also added to the EU sanctions list, said the global diamond industry is in a “deep crisis,” with prices falling for the second consecutive year.
According to the executive, the miner may reduce its labor costs by 10% in the coming year, which could include layoffs among its 35,000 staff.
“Certain areas that are less profitable, which are at the borderline of profitability, may be subject to suspension during this crisis period,” Marinychev told a local television station in the Yakutia region of Russia’s Far East, where most of Alrosa’s production is based.
He added that production in these areas could be quickly resumed if the market recovers.
“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,” Marinychev said.
Alrosa, which competes with Anglo American unit De Beers, stopped publishing sales data after Russia began its invasion of Ukraine in 2022.
By the end of that year, Alrosa’s production volume reached 35.5 million carats, a 10% increase year-on-year, accounting for over 90% of all Russian diamond production.
The Russian government regularly purchases diamonds from Alrosa through a state fund.
On Thursday, Deputy Finance Minister Alexei Moiseev said the country will continue to buy diamonds in 2025 to support the diamond industry and market.
The Russian budget for 2025-2027 has set aside $1.55 billion for the purchase of precious metals and gems, Moiseev said in a statement.
Russia will continue to ensure “stable global rough diamond prices in the wake of oversupply in the current market,” the statement read.
(With files from Reuters)
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