Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Russian diamond producer Alrosa’s third-quarter production fell 24% year on year but was up 62% from the previous quarter to 9.2 million carats, it said on Friday.
Alrosa, the world’s largest producer of rough diamonds, said coronavirus-hit demand started to recover in August but it added a note of caution on longer-term prospects.
“The diamond industry began to show signs of improvement. It is, however, too early to talk about a full recovery before we see the year’s key figures – the US holiday season sales,” the state-controlled company said in a statement.
Sales of rough and polished diamonds were at $589 million in the third quarter, a near-sevenfold increase on the previous three months but down 4% year on year.
Alrosa added that it had reduced prices while maintaining the profitability level required by the diamond-polishing industry. Its third-quarter diamond price index fell 7% from the previous quarter.
Its diamond stockpiles, meanwhile, were 30.6 million carats at the end of September, up 16% from the end of June.
Alrosa is in talks with the government about sale of some of its diamonds to state precious metals and gems repository Gokhran.
(Reporting by Polina Devitt Editing by David Goodman )
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