Alrosa starts construction of giant new diamond mine

Russia’s Alrosa, the world’s biggest diamond producing company, has started construction of a giant new mine to replace one closed by flooding that killed eight people in 2017, regional authorities said.

The website of the Yakutia region in Russia’s far east, where the mine is located, quoted Alrosa general director Pavel Marinychev as saying the project would require estimated investment of 121.5 billion roubles ($1.26 billion), with production to start in 2032.

The Mir mine accounted for about 9% of Alrosa’s annual diamond output before the shutdown. The new project at the site will be called Mir-Gluboky (Mir-Deep) and will yield roughly the same output as the old one, Marinychev said.

The total volume of diamond reserves is 173.5 million carats, he added. Output would reach 2 million tons of ore and 3 million carats of diamonds annually for more than 30 years.

Alrosa was last year placed under sanctions by the United States, which cut it off from its banking system and banned direct sales to the US market after Russia invaded Ukraine.

Last month the company reported a rise of 0.2% in revenue for the first half of the year but said net profit fell 35% year-on-year to 55.6 billion roubles.

($1 = 96.7920 roubles)

(By Mark Trevelyan; Editing by Ed Osmond)